Barstool Sports Eyes DraftKings Betting Partnership
Barstool Sports in Talks with DraftKings for a Lucrative Betting Deal
In a significant development within the sports media and betting landscape, Barstool Sports is currently engaged in negotiations with DraftKings to establish a sports betting partnership. This potential alliance comes at a pivotal moment as Dave Portnoy, the founder of Barstool Sports, has recently resumed control over the company.The Financial Implications
The deal under discussion could prove to be financially beneficial for Barstool Sports, with estimates suggesting it might be worth low eight figures on an annual basis. However, due to a lock-up arrangement, Barstool Sports will have to wait until after the Super Bowl to finalize any betting deals.Penn Entertainment's Exit from Barstool
This new chapter follows a notable shift in ownership, where Penn Entertainment sold their stake in Barstool back to Portnoy for the nominal sum of $1. Previously, Penn had invested heavily in Barstool, acquiring 36% of the company for $163 million before purchasing the remaining 64% for an additional $388 million. Despite these significant investments, Penn's strategy to leverage Barstool to promote their own sportsbook fell short of expectations.
As a consequence of this unsuccessful venture, Penn took an $850 million write-off from the acquisition. Following their exit from Barstool, Penn Entertainment has pivoted by partnering with ESPN to create 'ESPN Bet,' marking another strategic move within the industry.
It should be noted that if Portnoy decides to sell Barstool in the future, Penn will receive half of the gross proceeds from such a sale, ensuring they retain a financial interest in the company's success.Barstool's Betting Industry Restrictions
Currently, Barstool is restricted from actively entering the betting market until the conclusion of the current NFL season. Nevertheless, the company is poised to make a return to the sports betting arena, which has been a significant part of its brand identity.DraftKings' Marketing Strategy
DraftKings, a prominent player in the sports betting industry, reported investing $1.19 billion in sales and marketing during the fiscal year 2022. Notably, this marked the first decrease in marketing spending for the company in over three years. Additionally, DraftKings has ended its marketing partnership with ESPN, coinciding with ESPN's new collaboration with Penn for ESPN Bet.Barstool's Ongoing Influence in Gambling Advice
Despite the constraints on formal betting operations, Barstool continues to influence the gambling sphere by offering gambling advice and picks. The company's engagement with the betting community remains strong, as evidenced by the enthusiasm of its team. "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," said a representative from Barstool. They added, "But I think you'll see, into next year, that we start to establish ourselves back in that space."Future Expansion Plans
Looking ahead, Barstool plans to expand its footprint in the betting industry through strategic partnerships, potentially starting with the discussed deal with DraftKings. Such partnerships would enable Barstool to capitalize on its brand recognition and loyal following within the sports betting community.
In summary, the landscape of sports media and betting continues to evolve with Barstool Sports at the center of major developments. As the company navigates post-Super Bowl opportunities and seeks to re-establish itself within the betting market, all eyes will be on the outcome of its talks with DraftKings and how this will shape the future of sports betting collaborations.