The Chernin Group is in advanced talks to sell a majority stake in Barstool Sports to Penn National Gaming, Peter Kafka of Vox's Recode reports. This follows a report from The Big Lead from November that said there were advanced talks to sell Barstool to an unspecified sports gambling operator.
From the Recode story:
The deal would tie Barstool, a well-known company with a passionate audience, to a casino company you may have never heard of, which is part of the logic of the tie-up: Industry observers expect Penn National, which operates properties like the Hollywood Casino in Bangor, Maine, and the Greektown Casino-Hotel in Detroit, to adopt the Barstool brand for at least some of its operations. The most logical use of Barstool’s brand would be to help Penn National move into online sports betting, which the Supreme Court blessed on a state-by-state basis in May 2018.
Penn National is a publicly-traded company valued at $3 billion. It is not yet known how much money the sale is for. It is likely to provide an extensive amount of cash for Peter Chernin and Barstool founder Dave Portnoy.
UPDATE: Asked for comment about Recode's story, Dave Portnoy tells The Big Lead: "Same thing as I’ve publicly said since gambling was legalized in the United States. It’s a logical fit for us and we continue to speak or have spoken with everybody from Draftkings, to Fanduel to Stars to PointsBet to Penn to Willam Hill to MGM to Rush Street etc. I think that if we aligned ourselves with one company with a shared vision that company would have an extraordinary advantage in the race to becoming the leading gambling company in the United States."
As we wrote in our previous story: Chernin Group, led by longtime former Fox executive Peter Chernin, purchased a majority stake in Barstool in early 2016. Two years later, Chernin bought more of Portnoy's shares of the company in a deal that valued Barstool at $100 million. Portnoy still retained an undisclosed stake.
Sports gambling talk has always been a big part of Barstool, since it was a print newspaper that Portnoy was hustling around Boston T stations. In recent years, they have done the program Barstool Sports Advisors, first on FanDuel's network TVG and later on their own site. They regularly do live shows centered around big games at sportsbooks in New Jersey.
Last July, Barstool hired David VanEgmond away from FanDuel, where he had been EVP/head of strategy. Barstool Bets, which has thus far been a free-roll gambling platform where users can win cash prizes, launched in September.
In the race for user acquisition, it is easy to see how Barstool would have value for a gambling operator. They have an engaged fan base and the content can exist as a funnel -- for example, we see this happening with Fox Sports personalities and Fox Bet -- especially as widespread adoption of mobile gambling picks up across the United States.