Published on: September 5, 2023, 08:43h.
Last updated on: September 5, 2023, 08:45h.
Barstool Sports is reducing its workforce. This comes after the media company, known for its intersection of sports and bro culture, was returned to founder Dave Portnoy last month. The transition followed a financially disastrous partnership with Penn Entertainment.
Penn Entertainment operates 43 casinos in 20 states, with additional online sports betting operations in 17 markets and iGaming in five states.
In early 2020, Penn invested $163 million to acquire a 36% stake in Barstool Sports. Just this February, Penn purchased the remaining 64% for $364 million, increasing its total stake in Barstool to $527 million.
However, just six months later, Penn surprised the sports betting industry by announcing a $1.5 billion partnership with Walt Disney’s ESPN to establish a new sportsbook entity called ESPN Bet. As part of the deal, Penn agreed to transfer ownership of Barstool back to Portnoy for just one dollar.
Penn executives underestimated the regulatory challenges associated with Portnoy’s reputation, causing the Barstool Sportsbook to be denied gaming licenses in multiple states. Concerns were raised about Portnoy’s suitability as a key stakeholder in a state-issued gaming license.
Along with the half-billion-dollar acquisition of Barstool Sports, Penn Entertainment invested millions in rebranding its brick-and-mortar sportsbooks as Barstool-branded sports betting lounges. However, after divesting Barstool back to Portnoy, Penn will convert these spaces into ESPN Bet sportsbooks this fall.
Barstool Sports, under Portnoy’s leadership, will no longer be involved in sports betting or gaming activities. Unfortunately, employees who worked in these areas will be affected by the layoffs.
Prior to Penn’s acquisition, Barstool had approximately 130 employees. During its partnership with Penn, the staff expanded by around 300 positions.
As I’ve made clear to anyone paying attention, we will have layoffs and cuts, and they have already begun, and it sucks,” stated Portnoy last week on Barstool Sports Radio. “I hate firing people. Even if someone is incompetent or not working, I usually don’t fire them because I hate it so much. It’s the worst thing to do.”
Portnoy confirmed this week that 100 employees have already been let go.
“Having said that, we’re in a position where it’s a no-brainer. We have to reach a break-even point. We’re losing a lot of money, and it’s unfortunate,” explained Portnoy.
Barstool Sports will now refocus on its blogs and social media content, returning to its roots. Portnoy’s recent pizza review of Dragon Pizza in Somerville, Ma., generated significant attention after he dubbed it the “worst pizza place in America.”
A heated exchange between Portnoy and the pizza parlor’s owner garnered millions of views on Barstool’s social media channels.
Penn Sports Betting Units
Starting this winter, Penn Entertainment will no longer operate Barstool Sportsbooks at its casinos or online. The spaces will be transformed into ESPN Bet books, both offline and online where permitted.
Penn officials have stated that the company will continue to utilize theScore brand for its sports betting operations in Canada. Penn acquired theScore through a $2 billion acquisition of Score Media in August 2021.