Posted on: February 12, 2024, 01:39h.
Last updated on: February 12, 2024, 01:39h.
Just moments after the Kansas City Chiefs triumphed over the San Francisco 49ers in the Super Bowl last evening, Barstool Sports chief David Portnoy disclosed an extensively mentioned collaboration between his firm and DraftKings (NASDAQ: DKNG).
Chatter about such a partnership emerged around three weeks ago, but the two groups were prevented from making it official until after the big game due to Barstool’s non-compete agreement with Penn Entertainment (NASDAQ: PENN). That commitment was reached last August when the regional casino operator sold the sports media blog back to Portnoy for a mere $1 after the gaming company reached a sports betting agreement with ESPN.
I’m happy to announce that Barstool has signed a multi-year monster deal with @DraftKings We’re back to our roots. DK is once again the exclusive sports betting partner of Barstool Sports. The more things change the more they stay the same,” said Portnoy in a social media post with the hashtag “#dkpartner.”
Financial specifics of the Barstool/DraftKings pact weren’t disclosed, but it’s believed the agreement could be valued at upwards of $10 million over several years for Portnoy’s firm.
Barstool, DraftKings Reunited and it Feels So Good
Barstool and DraftKings, both of which are Boston-native companies, previously collaborated a decade ago with the media company acting as a platform for articles and conversation on daily fantasy sports (DFS), which was then DraftKings’ top pursuit.
That was four years before the Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA). That move paved the way for states to decide the legality of sports wagering in their jurisdictions and when the floodgates opened, the landscape of betting and media partnerships changed forever.
In part, that motivated Barstool and Penn to join forces in 2020 when the regional casino operator paid $163 million for a 36% stake in Portnoy’s firm. Penn would ultimately pay north of $550 million to own Barstool outright before parting ways to work with ESPN.
Curiously, that transaction paved the way for Caesars Entertainment (NASDAQ: CZR) and DraftKings to move forward from what were believed to be expensive relationships with ESPN. Among gaming companies, DraftKings is one of pioneers in seeing value in media deals as the operator acquired the Vegas Sports Information Network (VSiN) and struck a content distribution deal with Meadowlark Media in 2021.
Portnoy Comes Out Ahead, Gets Back to Betting
Penn’s acquisition of Barstool provided Portnoy with generational wealth and his ability to repurchase his firm for just $1 will likely support his efforts to add to his fortune because the company is likely worth hundreds of millions of dollars.
In the wake of the Penn separation, Portnoy acknowledged that he may have hindered that operator’s efforts to obtain sports betting licenses in some states, but added that he has no plans to ever again sell Barstool. As for working with DraftKings again, it provides the media company with an outlet to discuss sports wagering with an official financial backer.
On a related note, some industry commentators believe it was an oversight on Penn’s part to impose such a short non-compete on Portnoy and an omission to allow that stipulation to end on the day of the Super Bowl.