Barstool Sports Eyes DraftKings Betting Deal Amidst Major Changes
Barstool Sports in Talks with DraftKings for a Lucrative Betting Deal
In a significant turn of events, Barstool Sports is currently in discussions with DraftKings to forge a sports betting partnership potentially worth low eight figures annually. This development comes as Dave Portnoy, the company's founder, has taken back the reins of his media empire.
The negotiations between Barstool and DraftKings cannot be finalized immediately, however. Due to a lock-up agreement, any deals in the betting arena are on hold until after the Super Bowl. This pause provides both parties time to strategize and plan for a robust partnership that could reshape the sports betting landscape.Penn Entertainment Sells Stake Back to Portnoy
In a surprising move, Penn Entertainment (formerly known as Penn National Gaming) sold their stake in Barstool back to Portnoy for a nominal $1. This transaction marks a stark contrast from Penn's initial investment, where they acquired 36% of Barstool for $163 million before purchasing the remaining 64% for an additional $388 million.
Penn's decision to divest came after their strategy to leverage Barstool's brand to bolster their sportsbook failed to live up to expectations. The entertainment company has since moved on to partner with ESPN, creating a new venture named ESPN Bet. As part of this shift away from Barstool, Penn recorded an $850 million write-off from their acquisition of the media company.
Interestingly, the sale to Portnoy carries a clause: if Barstool is sold in the future, Penn will receive half of the gross proceeds from the sale.Barstool's Betting Industry Hiatus and Future Plans
As it stands, Barstool is temporarily sidelined from entering the betting industry until the current NFL season concludes. Despite this temporary setback, the company is poised to make a strong comeback in the sports betting market.
Portnoy himself has emphasized the importance of betting to Barstool's identity, stating, "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."
Barstool's plans are not just limited to direct market re-entry; they also aim to expand their influence through strategic partnerships. With a history of offering gambling advice and picks, Barstool is well-positioned to regain its foothold in the industry once restrictions lift.DraftKings Scaling Back Marketing Spend
DraftKings, a leading player in the sports betting market, invested a staggering $1.19 billion in sales and marketing during fiscal 2022. Notably, this marked the first decrease in marketing spend for the company in over three years, signaling a potential shift in strategy or a response to market conditions.
Furthermore, DraftKings ended its marketing partnership with ESPN, which coincidentally partnered with Penn for ESPN Bet. This termination opens up new avenues for DraftKings to explore other promotional strategies, potentially including the discussed deal with Barstool Sports.Looking Ahead
The landscape of sports betting is continuously evolving, with major players like Barstool Sports and DraftKings at the forefront of innovation and partnership. As Barstool prepares to dive back into the betting pool, the anticipated collaboration with DraftKings could usher in a new era for sports enthusiasts and bettors alike.
With Portnoy back in charge and a clear vision for the future, Barstool Sports appears ready to reclaim its status as a dominant force in the sports betting domain. The end of the NFL season may mark the beginning of a new chapter for the company, one that could redefine the boundaries between sports media and betting industries.