Barstool Sports Eyes DraftKings Betting Partnership
Barstool Sports in Talks with DraftKings for a Lucrative Betting Deal
In a significant shift within the sports media and betting landscape, Barstool Sports has entered negotiations with DraftKings to forge a sports betting partnership potentially worth low eight figures annually. This development comes after Dave Portnoy, the company's controversial yet charismatic founder, regained control of Barstool Sports.Penn Entertainment Divests from Barstool
The backdrop to this new chapter is Penn Entertainment's decision to sell its stake in Barstool back to Portnoy for a nominal fee of $1. Previously, Penn had made substantial investments in the digital media company, acquiring 36% for $163 million and later purchasing the remaining 64% for an additional $388 million. However, Penn's strategy to leverage Barstool's brand to boost their sportsbook did not yield the expected results, leading to an $850 million write-off from the acquisition.
Following the divestment, Penn has partnered with ESPN to launch ESPN Bet, pivoting away from their initial approach with Barstool. Despite the separation, if Portnoy decides to sell Barstool in the future, Penn will still receive half of the gross proceeds from the sale.Lock-Up Arrangement Delays Betting Deals for Barstool
As part of the agreement, Barstool is currently under a lock-up arrangement that prevents the company from finalizing any betting deals until after the Super Bowl. This restriction aligns with the broader prohibition against Barstool entering the betting industry until the conclusion of the current NFL season.Barstool's Ambitions in the Betting Industry
Despite these limitations, Barstool's intent to re-enter the sports betting market is clear. The company continues to offer gambling advice and picks, reinforcing its connection to the betting community. As Portnoy stated, "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 underscores Barstool's ongoing commitment to sports betting and hints at a strategic expansion through partnerships, like the one being discussed with DraftKings.DraftKings Adjusts Its Marketing Strategy
DraftKings, a leader in the digital sports entertainment and gaming industry, invested $1.19 billion in sales and marketing during fiscal 2022. Interestingly, this marked the first decrease in marketing spending by the company in over three years. Additionally, DraftKings ended its marketing partnership with ESPN, which coincided with ESPN's new collaboration with Penn for ESPN Bet.Looking Ahead
As the sports betting sector continues to evolve, the potential alliance between Barstool Sports and DraftKings could signal a new era of synergies between media personalities and betting platforms. With Portnoy at the helm once again, Barstool seems poised to make a significant impact as it reasserts itself in the sports betting domain.
The unfolding story of Barstool's rebound in the betting arena, coupled with the strategic moves by Penn and DraftKings, illustrates the dynamic nature of the sports betting and media industries. Stakeholders and observers alike will be watching closely to see how these developments will shape the future of sports entertainment and gambling.