For quite some time, there were speculations regarding the possibility of Barstool Sports, one of the biggest brands in sports media, joining the likes of Yahoo! Sports in offering sports betting services. Well, these are no longer mere speculations.
Earlier this week, renowned gaming operator Penn National Gaming confirmed that it has recently inked a lucrative partnership deal with a sports media company which turns out to be Barstool Sports. Penn National Gaming now owns a 36 percent interest in Barstool Sports Inc., an acquisition that will cost it about $163 million plus convertible preferred stock.
Set to close within the first quarter of 2020, the acquisition-cum-partnership deal values the sports media company at about $450 million. This makes it a pretty lucrative investment. In fact, it is so good that Penn National has plans to increase its ownership of the media company to about 50 percent after three years.
Capitalizing on Barstool’s Growing Customer Base
Prior to inking a deal with Penn National Gaming, Barstool Sports has already acquired some sports betting experience. This was through sports betting partnerships with a number of popular sports betting brands including MGM, PointsBet, DraftKings and FanDuel. Through those collaborative efforts, the company has been able to amass a large following that consists of sports fans and sports bettors – in total, it boasts of up to 66 million unique monthly users. No wonder it caught the eyes of Penn National’s management.
“After talking to every media company in the industry – both large and small – we knew when we found Barstool that they were the right partner for us,” said Jon Kaplowitz, the head of Penn Interactive for Penn National.
The terms of the partnership deal stipulate that Penn National Gaming will remain Barstool Sports exclusive gaming partner for the next four decades. During this period, it will have exclusive rights to use the Barstool Sports brand across all of its products and offerings. Despite this, Barstool Sports will still be run independently.
According to Erika Nardini, the chief executive of Barstool Sports, the deal was a no-brainer for the company especially because of Penn National’s excellent reputation. The gaming company shared its vision of transforming the Barstool Sports brand into a formidable sports betting brand. This will be through a number of popular channels including online and retail. Fans will soon have access to a sports betting app and there are reportedly plans for a casino as well. The app is likely to be launched in the third quarter of 2020.
Barstool Sports aside, more sports media companies are beginning to experiment with the idea of sports betting. Since they already have humongous customer bases, they have an advantage that many other players in the sector do not have.