Barstool Sports Eyes DraftKings Betting Deal Amidst Ownership Shift
Barstool Sports in Talks with DraftKings for a Betting Deal
In an intriguing turn of events, Barstool Sports is currently in negotiations with DraftKings to forge a potentially lucrative sports betting partnership. This development comes after Dave Portnoy, the company's outspoken founder, has retaken control of Barstool Sports.
The deal under discussion could prove highly profitable for Barstool, with figures speculated to be in the low eight-figure range annually. However, any formal agreement must wait until the conclusion of the Super Bowl due to a lock-up arrangement that presently restricts Barstool's ability to finalize betting deals.Penn Entertainment Sells Stake Back to Portnoy
This news follows the surprising decision by Penn Entertainment to sell their stake in Barstool back to Portnoy for a nominal fee of $1. It was a dramatic shift from their initial investment strategy, where Penn had acquired 36% of Barstool for $163 million, subsequently purchasing the remaining 64% for $388 million.
Penn's original plan to leverage Barstool's brand to bolster their own sportsbook operations fell short of expectations. As a result, Penn has shifted gears and formed a new alliance with ESPN to launch ESPN Bet, leaving Barstool to chart its own course forward.
From the acquisition of Barstool, Penn took a significant financial hit, recording an $850 million write-off. Nonetheless, the agreement stipulates that if Portnoy decides to sell Barstool, Penn will receive half of the gross proceeds from the sale.Barstool's Betting Industry Hiatus
Currently, Barstool is prohibited from engaging in the betting industry until the end of the current NFL season. Despite this temporary hiatus, the company's ambitions remain clear: Barstool is poised to re-enter the sports betting market with renewed vigor.
DraftKings, a major player in the sports betting arena, might be an ideal partner for Barstool. In fiscal 2022, DraftKings invested a substantial $1.19 billion in sales and marketing. Notably, this marked the first time in over three years that DraftKings decreased its marketing spend.
The potential collaboration between Barstool and DraftKings arrives on the heels of DraftKings ending its marketing partnership with ESPN, which has since partnered with Penn to create ESPN Bet.Barstool's Ongoing Influence in Sports Gambling
Despite being temporarily sidelined from direct participation in the betting industry, Barstool continues to influence the gambling space through the provision of gambling advice and picks. These activities are part of the company's DNA, as Portnoy himself highlights the ingrained culture of betting within the organization.
"I would still argue that [sports betting] is a huge part of what we do today. Our crew bets obsessively on games, we always have... But I think you'll see, into next year, that we start to establish ourselves back in that space," Portnoy remarked, signaling a clear intention to reassert Barstool's presence in the sports betting landscape.Looking Ahead
As Barstool Sports gears up to re-establish itself in the betting industry, the potential partnership with DraftKings could represent a significant step forward. The synergy between Barstool's robust content creation and DraftKings' established betting platform may well redefine strategies for engaging sports bettors.
With plans to expand its presence through strategic partnerships, Barstool appears ready to leverage its brand and loyal following to once again become a formidable force in the sports betting sector. The coming months will be critical as they navigate the post-lock-up period and seek to capitalize on the burgeoning opportunities within the sports gambling ecosystem.