Barstool Sports founder Dave Portnoy admitted his company ‘isn’t a good fit in the gambling industry’ following the collapse of Barstool’s $550m partnership with Penn Entertainment.
Portnoy is now the 100% owner of Barstool Sports after former parent Penn Entertainment sold it back to him, instead opting to pursue a 10-year sports betting deal with ESPN which will see Barstool Sportsbook become ESPN Bet.
The 46-year-old businessman admitted he underestimated how difficult it was for Barstool to work in a regulated space, which he personally was partly at fault for.
“And I think we underestimated how tough it is for myself and Barstool to operate in a regulated world where gambling operators, the New York Times, [and] Business Insider hit pieces [are] f****** with the stock price. Every time we did something it was one step forward, two steps back.”
“We got denied [gambling] licenses because of me, you name it,” Portnoy said. “So the regulated industry [is] probably not the best place for Barstool Sports and the type of content we make.”
“For the first time in forever, we don’t have to watch what we say, how we talk, what we do. It’s back to the pirate ship.”
Emergency Press Conference – I Bought Back Barstool Sports pic.twitter.com/dmUk0eNowx
— Dave Portnoy (@stoolpresidente) August 8, 2023
Just a few months after completing a $550m deal to acquire 100% control of Barstool, Penn have decided to cut ties and instead have teamed up with ESPN. They initially took a 36% stake in Barstool for $163m back in 2019 and spent another $388m to buy the remaining interest in February.
Penn will pay $1.5 billion to ESPN over a 10-year period and grant ESPN $500m in warrants to purchase 31.8 million Penn common shares that will vest over 10 years in exchange for media, marketing services, brand and other rights.
Portnoy paid a single dollar to take back control of the company, but did agree to certain noncompete agreements and to provide Penn with 50% of gross proceeds in the event of a future sale or monetization event.
