Barstool Sports Eyes DraftKings Betting Partnership
Barstool Sports in Talks with DraftKings for a Lucrative Betting Deal
In a surprising turn of events, Barstool Sports has entered negotiations with DraftKings for a sports betting partnership potentially worth low eight figures annually. This development comes after Dave Portnoy, the company's founder, regained full control of the brand.
Portnoy took back the reins of Barstool Sports by purchasing Penn Entertainment's stake for a nominal fee of $1. Penn had initially bought 36% of Barstool for $163 million and later acquired the remaining 64% for an additional $388 million. However, their strategy to leverage Barstool's influence to bolster their own sportsbook fell short of expectations, prompting them to divest their interest.ESPN Bet: Penn's New Venture After Barstool
Following the sale of Barstool, Penn Entertainment did not abandon its aspirations in the sports betting market. Instead, it teamed up with ESPN to launch ESPN Bet, marking a new chapter in their business strategy. As part of this shift, Penn absorbed an $850 million write-off from the Barstool acquisition. Despite stepping away from Barstool, Penn will still benefit financially if Portnoy decides to sell the company, as they are entitled to half of the gross proceeds from any potential sale.Barstool's Betting Industry Hiatus
Barstool's re-entry into the sports betting market is on pause due to a lock-up arrangement that prevents the company from finalizing any betting deals until after the Super Bowl. Additionally, Barstool is currently barred from participating in the betting industry until the conclusion of the current NFL season. Nevertheless, the company has made it clear that it intends to make a strong comeback in the sports betting space.DraftKings Slows Down Marketing Investment
DraftKings, a major player in the industry, invested a whopping $1.19 billion in sales and marketing during fiscal 2022. Notably, this marked the first decrease in marketing spend for the company in over three years. This reduction in investment coincided with the termination of DraftKings' marketing partnership with ESPN, which subsequently joined forces with Penn for ESPN Bet.Barstool's Future in Sports Betting
Despite the temporary restrictions, Barstool continues to be a source of gambling advice and picks for its dedicated audience. The company is actively planning to expand its presence in the betting industry through strategic partnerships. In a statement reflecting on Barstool's intentions, Portnoy emphasized the brand's ongoing commitment to sports betting:
"I would still argue that [sports betting] is a huge part of what we do today. Our crew bets obsessively on games, we always have... But I think you'll see, into next year, that we start to establish ourselves back in that space."Conclusion
The landscape of sports betting is witnessing significant shifts as key players like Barstool Sports and Penn Entertainment redefine their strategies. With Barstool's anticipated resurgence in the betting market and the emergence of ESPN Bet, the competition is intensifying. All eyes will be on how these strategic moves play out, and whether Barstool's potential partnership with DraftKings will shape the future of sports betting.