Barstool Sports Eyes DraftKings Betting Partnership
Barstool Sports in Talks with DraftKings for a Lucrative Betting Deal
In a surprising turn of events, Barstool Sports has entered negotiations with DraftKings to forge a sports betting partnership potentially worth low eight figures annually. This development follows the news that Dave Portnoy, the company's controversial and charismatic founder, has regained full control of the brand.The Return of Portnoy
Portnoy's reacquisition of Barstool Sports comes after Penn Entertainment (formerly known as Penn National Gaming) sold their stake back to him for a nominal fee of $1. This deal marks a stark contrast to the previous transactions where Penn had invested heavily in Barstool, purchasing 36% for $163 million and later acquiring the remaining 64% for an additional $388 million.Penn's Pivot Away from Barstool
Penn's initial strategy aimed to leverage Barstool's brand to boost their own sportsbook operations. However, this move did not yield the anticipated results, leading to an $850 million write-off for Penn and a strategic pivot away from Barstool. In the aftermath, Penn has teamed up with ESPN to launch ESPN Bet, signaling a new direction for their betting initiatives.Restrictions and Future Plans
Despite the change in ownership, Barstool is currently restricted from finalizing any betting deals until the conclusion of the Super Bowl due to a lock-up arrangement. Additionally, the company is barred from entering the betting industry until the current NFL season ends. Nevertheless, Barstool is already planning its return to the sports betting market, with intentions to expand through strategic partnerships once these restrictions are lifted.Financial Implications for Penn
It is important to note that if Portnoy decides to sell Barstool in the future, Penn will still benefit financially by receiving half of the gross proceeds from the sale. This clause ensures that Penn retains a stake in Barstool's potential success even after divesting their ownership.DraftKings' Marketing Shift
DraftKings, a major player in the sports betting arena, invested a staggering $1.19 billion in sales and marketing during fiscal 2022. Interestingly, this marked the first decrease in marketing spending for the company in over three years. Furthermore, DraftKings ended its marketing partnership with ESPN, which subsequently partnered with Penn for ESPN Bet.Barstool's Continued Influence
Despite the shifts in partnerships and ownership, Barstool continues to offer gambling advice and picks to its audience. The brand remains influential in the sports betting discourse, and its content creators remain engaged in the practice. As one quote from the article suggests, "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."
This statement encapsulates the essence of Barstool's commitment to sports betting, highlighting the company's enduring passion for the activity and its plans to re-establish a significant presence in the industry.Looking Ahead
The landscape of sports betting is continually evolving, with companies like Barstool and DraftKings at the forefront of this dynamic market. As Barstool navigates its post-Penn era and explores new opportunities with DraftKings, the industry watches with keen interest. The potential partnership between these two powerhouses could significantly impact the sports betting scene, ushering in a new chapter for Barstool Sports as it seeks to reclaim its position as a leader in the domain.