Penn National Gaming completes acquisition of Barstool stake

Penn National Gaming has completed its acquisition of a stake in Barstool Sports.

Yesterday, the US casino giant Penn National Gaming (PNG) announced the completion of its acquisition of a 36% stake in Barstool Sports for $163m.

The acquisition was announced last month and is part of a much wider agreement between the two companies.

What’s covered in the deal?

Under the deal, PNG has become Barstool Sports’ “exclusive gaming partner” for up to 40 years and have the sole right to use the digital sports media company for all of its online and land-based sports betting and online casino products.

PNG funded the purchase with approximately $135m in cash and $28m in shares of non-voting convertible preferred stock. After three years, Penn will increase its ownership to approximately 50% with an incremental investment of about $62m. The transaction has valued Barstool Sports at $450m.

Now that deal has been completed, entities affiliated with The Chernin Group, which previously owned approximately 60% of Barstool Sports, now own 36% of the media company and the remaining 28% will be held by Barstool Sports’ employees including its founder Dave Portnoy and the company’s chief executive Erika Nardini.

Jay Snowden, President and Chief Executive Officer of Penn National, said: “Since announcing our groundbreaking partnership with Barstool at the end of January, we have seen first-hand the power of the Barstool brand to generate significant consumer interest and increased engagement between Barstool, their loyal audience of ‘Stoolies’ and our own nationwide platform of 41 properties in 19 states. Our two teams have hit the ground running and are working on plans to roll out the Barstool Sportsbook brand through both our retail sportsbooks and our interactive products.

“In addition, our interactive product development team is continuing its work towards the launch of our new sports betting app which is planned for August. Penn National shares the excitement of Dave Portnoy, Erika Nardini and the entire team at Barstool Sports and looks forward to creating what will be the industry’s best-in-class omni-channel provider of retail and online gaming and sports betting entertainment.”

What has Penn National been up to?

After announcing the agreement to purchase a stake in Barstool, PNG reported a 53.1% year-on-year drop in net income in 2019, despite reporting an increase of 47.8% in revenue. According to the report, Penn’s total revenue for the 12 months to 31 December 2019 amounted to $5.30bn, up from the $3.59bn generated the year prior.

Shortly after announcing the deal with Barstool, Penn inked a multi-year agreement with the stock car racing series, NASCAR which marked the first-ever partnership between Penn and a professional sports league.

Under the deal, Penn will become one of NASCAR’s authorized gaming partners and will allow the operator to offer a new free-to-play mobile game with a $50,000 jackpot up for grabs every race. Penn will also promote the NASCAR brand at its properties and on its sports betting app once it launches. NASCAR and Penn have also agreed to extend their sponsorship of the Hollywood Casino 400 at Kansas Speedway up until 2026.

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