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Penn National seals Barstool Sports partnership


Penn National Gaming (PNG) has entered into an exclusive sports wagering and online casino partnership with Barstool Sports, in a deal that will also see the operator acquire a 36% stake in the digital sports media company.

Under the arrangement, PNG will pay $163m for the stake, securing its position as Barstool’s exclusive gaming partner for up to 40 years.

PNG will fund the purchase with $135m in cash and $28m in share of non-voting convertible preferred stock. After three years, PNG will increase its ownership to approximately 50% with an incremental investment of approximately $62m.

The deal will also give PNG the sole rights to use the Barstool brand for all of its online and retail sports betting and online casino products. The operator has already begun taking over operation of its bricks-and-mortar sportsbooks, and is in the process of developing a mobile product, in partnership with Kambi. This is likely to launch in the third quarter of 2020.

“With its leading digital content, well-known brand and deep roots in sports betting, Barstool Sports is the ideal partner for Penn National and will enable us to attract a new, younger demographic, which will nicely complement our existing customer database,” PNG president and chief executive Jay Snowden said.

“In addition, with 66 million monthly unique visitors, we believe the significant reach of Barstool Sports and loyalty of its audience will lead to meaningful reductions in customer acquisition and promotional costs for our sports betting and online products, significantly enhancing profitability and driving value for our shareholders.”

Barstool Sports chief executive Erika Nardini added: “Barstool Sports is a dynamic content company that has grown into a media juggernaut thanks to some of the best talent and fans in the world.

“Over the last five years, Barstool Sports has brought its audience, creativity and expertise to the biggest sports betting and DFS operators in the country with great results. The chance to combine our content and fans with Penn National’s massive footprint, and to develop a unique and compelling omni-channel approach together, was for us a no brainer.”

PNG will have the option to bring in another partner to acquire a portion of its shares of Barstool. In addition, PNG will have customary governance rights, including an initial two seats on Barstool’s seven-member board of directors.

After the deal closes, entities affiliated with The Chernin Group, which previously owned approximately 60% of Barstool, will own 36% of Barstool. The remaining 28% will be held by Barstool’s employees, including Nardini and its founder Dave Portnoy.

Portnoy described the opportunity created by the PNG partnership as one of the reasons why he started Barstool Sports.

“Barstool Sports has a deep sports and gaming history and from the moment we met Jay and the Penn National team we knew this could be an exciting and game changing partnership and we can’t wait to get started,” he said. “I think with our shared vision and goals, we are uniquely positioned to be a leader in this business.”

Chernin Group partner Mike Kerns added: “We have long believed in the power of Barstool Sports’ unique brand, and with Erika’s leadership and Dave’s vision, the company has realized remarkable growth over the last four years.

“We believe the marriage of the Barstool brand and passionate audience with Penn National’s gaming leadership will change the industry.”