Dave Portnoy is taking back the reins at Barstool Sports buying back the media company from Penn Entertainment (NASDAQ:PENN), as a side-deal to the casino and betting group’s market-shaking new team-up with Disney's (NYSE:DIS) ESPN.
Portnoy - the podcaster, social media personality and media entrepreneur that launched Barstool Sports in 2003 - is buying back Barstool just five months after Penn took full ownership for an aggregate cost of US$551 million.
Penn bought 36% of Barstool for US$163 million in 2019, before picking up the rest for US$388 million in February 2023.
Barstool acted as a source of content and an integral part of the marketing strategy for Penn’s online sports betting operation.
With the Disney deal under exclusive terms, Portnoy now takes back the company albeit Penn retains rights to 50% of any gross proceeds should the Barstool founder again sell either a stake or all the business.
Disney’s ESPN is teaming up with Penn Entertainment in a new venture, meanwhile, the Barstool Sports digital media brand is being sold back to its founder Dave Portnoy.
ESPN partners with Penn to create the new ESPN Bet brand, via an exclusive ten-year licensing deal, to run a sportsbook for audiences in the United States.
It immediately will give the Disney business presence in 16 states as a licensed sports betting operator via a mobile app, website, and retail locations.
Penn pays some US$1.5 billion to ESPN over the anticipated life of the partnership.
The surprise news saw Penn stock soar as much as 25% in afterhours trading, with the stock changing hands as high as US$31.76 immediately afterwards.
Draftkings Inc (NASDAQ:DKNG) stock, meanwhile, fell close to 9% trading beneath US$29.00 as traders quickly took seriously the challenge from the new Disney-backed competitor.