Barstool Sports Eyes DraftKings Deal Amid Betting Market Return
Barstool Sports in Talks with DraftKings for a Lucrative Betting Deal
In a surprising turn of events, Barstool Sports is currently in negotiations with DraftKings to forge a sports betting partnership potentially worth low eight figures annually. This development comes after Dave Portnoy, the company's outspoken founder, regained control of the media entity known for its sports and pop culture content.Restructuring at Barstool Sports
The road to this new potential alliance has been paved by significant corporate changes. Penn Entertainment, previously holding a majority stake in Barstool, sold their share back to Portnoy for a nominal fee of $1. This move followed Penn's initial acquisition of 36% of Barstool for $163 million, before purchasing the remaining 64% for an additional $388 million.
However, Penn's strategy to leverage Barstool's brand to bolster their own sportsbook did not yield the anticipated results. Consequently, Penn has since shifted focus, partnering with ESPN to launch ESPN Bet, while taking an $850 million write-off from the Barstool purchase. Despite this divestment, if Portnoy were to sell Barstool in the future, Penn would still receive half of the gross proceeds.Market Maneuvering
Barstool's re-entry into the betting market has been delayed due to a lock-up arrangement prohibiting any finalized betting deals until after the Super Bowl. This clause underscores the company's ongoing commitment to the industry, despite being temporarily barred from direct involvement until the current NFL season concludes.
DraftKings, a leader in the digital sports entertainment and gaming industry, has shown a keen interest in expanding its reach through strategic investments and partnerships. The company invested a staggering $1.19 billion in sales and marketing during fiscal 2022, marking a notable decrease and the first time in over three years that their marketing spend has declined. This reduction coincides with DraftKings ending its marketing partnership with ESPN, which has since joined forces with Penn for ESPN Bet.Barstool's Betting Ambitions
Despite these shifts in alliances and ownership, Barstool has maintained its presence in the gambling sphere, continuing to offer gambling advice and picks to its audience. The brand is well-known for its passionate and engaged community, many of whom are avid sports bettors themselves.
Portnoy himself emphasized the importance of sports 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." This sentiment signals Barstool's intention to not only return to but also expand its footprint within the sports betting industry through strategic partnerships.The Future of Sports Betting and Media
The evolving landscape of sports betting and media collaborations points to a future where these two industries are increasingly intertwined. Companies like Barstool Sports and DraftKings are at the forefront of this movement, seeking to capitalize on the synergies between sports media content and betting platforms.
As the dust settles on Barstool's corporate restructuring and the sports betting market continues to mature, all eyes will be on how these developments impact the broader industry. With its dedicated following and brand recognition, Barstool Sports is poised to make a significant comeback in the betting arena, potentially reshaping the dynamics of sports entertainment and gambling once again.