Just how much did Dave Portnoy pay to buy back Barstool Sports from Penn Entertainment?
According to a new securities filing, Portnoy acquired the sports media brand he founded for just $1.
Of course, there are other pieces to the deal, but the shocking sale price (Penn spent $551 million to acquire Barstool) makes for an interesting end to that relationship. Penn says that it expects to record a loss of between $800 million-$850 million on the deal.
Penn of course announced a deal with ESPN to rebrand its Barstool Sportsbook as ESPN Bet, and will pay ESPN $1.5 billion and $500 million in stock warrants for the privilege.
That meant abandoning the Barstool brand, which it acquired in full just earlier this year (it initially bought a stake in 2020).
“Pursuant to the Barstool SPA, PENN sold 100% of the outstanding shares of Barstool to David Portnoy in exchange for a nominal cash consideration ($1.00 dollar) and certain non-compete and other restrictive covenants,” the company wrote in its quarterly report Wednesday.
Portnoy also agreed to give Penn 50 percent of the proceeds from any future sale of Barstool Sports, while Penn agreed to “indemnify Barstool and its subsidiaries and David Portnoy for certain tax matters.”
Portnoy founded Barstool Sports in 2003, eventually building it into a powerhouse sports-adjacent brand that is popular with young men. When it initially cut a deal with Penn, the gambling company hoped to use the Barstool brand name to give it a leg up in the nascent sports betting business. Now, with ESPN, Penn is betting that the sports media giant can propel it further in the space, while jettisoning Barstool back to its founder.