Barstool Sports in Talks for a DraftKings Betting Deal
Barstool Sports Eyes Lucrative Deal with DraftKings
In a significant development in the sports media and betting landscape, Barstool Sports is currently in negotiations with DraftKings over a potential sports betting partnership. The deal, which could see Barstool reasserting itself in the sports betting market, is estimated to be worth low eight figures annually for the media company.Dave Portnoy Back at the Helm
Dave Portnoy, the founder of Barstool Sports, has reclaimed control of the company. This move comes after Penn Entertainment, previously known as Penn National Gaming, sold their stake back to Portnoy for a nominal fee of $1. Penn had initially acquired a 36% interest in Barstool for $163 million, subsequently buying the remaining 64% for $388 million. However, Penn's strategy to leverage Barstool's brand to boost its own sportsbook fell short of expectations, leading to a strategic pivot away from Barstool.Restrictions and Future Aspirations
As part of the terms of the divestment, Barstool is currently under a lock-up arrangement that prevents it from finalizing any sports betting deals until after the Super Bowl. Additionally, Barstool is restricted from participating in the betting industry throughout the current NFL season. Despite these limitations, the company is poised to re-enter the sports betting market, with plans to expand its presence through strategic partnerships.Penn's New Direction with ESPN Bet
Following the sale of Barstool, Penn Entertainment has embarked on a new venture, partnering with ESPN to launch ESPN Bet. This collaboration marks a fresh approach to integrating sports media and betting platforms. Penn's decision to offload Barstool came at a significant financial cost, with the company taking an $850 million write-off from the acquisition. Nevertheless, should Portnoy sell Barstool in the future, Penn will receive half of the gross proceeds from the sale.DraftKings' Marketing Strategy Shift
DraftKings, a major player in the sports betting industry, invested a substantial $1.19 billion in sales and marketing during fiscal 2022. Interestingly, this marked the first decrease in marketing spend for the company in over three years. The shift in strategy coincides with the termination of DraftKings' marketing partnership with ESPN, which has since aligned with Penn for ESPN Bet.Barstool's Continued Influence in Gambling
Despite the ongoing negotiations and restrictions, Barstool continues to offer gambling advice and picks to its audience. The company's passion for sports betting remains evident, with Portnoy emphasizing the significance of betting within the company's culture: "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."Looking Ahead
The potential partnership with DraftKings signals a promising future for Barstool Sports as it seeks to reclaim its position in the sports betting arena. With the end of the NFL season on the horizon, the company is gearing up to make a splash in the market, leveraging its robust following and brand recognition to secure a foothold once again. As the sports betting landscape continues to evolve, all eyes will be on Barstool to see how it navigates this next chapter in its storied history.