Barstool Sports Eyes DraftKings Betting Partnership
Barstool Sports in Talks with DraftKings for a Lucrative Betting Deal
In an intriguing twist of events within the sports media and betting landscape, Barstool Sports is currently in negotiations with DraftKings over a potential sports betting partnership. This deal, speculated to be in the low eight-figure range annually, could mark a significant move for Barstool as it seeks to re-establish its foothold in the sports betting market.Dave Portnoy Back at the Helm
Dave Portnoy, the founder of Barstool Sports, has once again taken the reins of the company. His return comes after Penn Entertainment, formerly known as Penn National Gaming, sold their stake back to Portnoy for a nominal fee of $1. This transaction reversed Penn's previous investments, where they initially acquired 36% of Barstool for $163 million and subsequently the remaining 64% for an additional $388 million.Penn Entertainment's Shift in Strategy
Penn's decision to divest from Barstool followed what was deemed an underwhelming performance in using the brand to bolster their sportsbook operations. The company has since pivoted, partnering with ESPN to launch ESPN Bet, a new collaborative venture in the sports betting arena. This move came at a considerable cost to Penn, which reported an $850 million write-off from their acquisition of Barstool.
Despite the separation, there remains a financial tether between Penn and Barstool; should Portnoy decide to sell Barstool in the future, Penn is entitled to half of the gross proceeds from the sale.Restrictions and Intentions
Currently, Barstool is bound by a lock-up arrangement that prevents the finalization of any betting deals until after the Super Bowl. Additionally, the company must navigate a non-compete clause that prohibits entry into the betting industry until the conclusion of the current NFL season. Despite these limitations, Barstool is adamant about its plans to dive back into the sports betting scene.DraftKings Scaling Back Marketing Spend
On the other side of this potential partnership is DraftKings, a company that invested heavily in sales and marketing to the tune of $1.19 billion in fiscal 2022. However, this marked the first time in over three years that DraftKings reduced its marketing expenditure. This scaling back coincided with the termination of its marketing partnership with ESPN, which has since joined forces with Penn for ESPN Bet.Barstool's Betting Content Continues
Amidst all the strategic shifts, Barstool has maintained its identity as a source of gambling advice and picks, with Portnoy himself emphasizing the significance of sports betting to the brand. "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 stated.Looking Ahead
As Barstool gears up to make its return to the sports betting market, the company is actively exploring partnerships to expand its presence. The outcome of the discussions with DraftKings could set the stage for Barstool's next chapter in the competitive world of sports betting. With Dave Portnoy back at the helm and a clear intent to regain lost territory, the industry is watching closely to see how these plays will unfold in the game of high-stakes sports betting partnerships.