Dave Portnoy sold half of Barstool Sports to Penn Gaming for $550 million in 2020, but when Penn struck a $2 billion deal with ESPN instead, it handed the stake back to Portnoy for free, keeping only rights to future profits. A masterclass in deal-making.
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Hate 'em or love 'em, Dave Portnoy just pulled off something absolutely insane. After selling half of Barstool to Penn Gaming for $550 million, he got it all back for free. Long story short is the initial deal from 2020 that Penn Gaming did with Barstool was not working out for Penn. So they ditched Barstool and they cut a deal with ESPN. Now for context, ESPN is the 800-pound gorilla in the room here. They are about 10 to 20 times bigger than Barstool in terms of traffic and unique visitors. So if you're trying to get those people to turn from visits to your sports news, into gamblers, it's probably better to have a deal with ESPN. And they're gonna pay about $2 billion for that deal. Which, if you guys are wondering, means that ESPN is getting into gambling. Makes a lot of sense. So Penn gave Barstool back to Dave Portnoy for free with the deal that if there's ever a liquidity event or distributions from the company, like dividends, they get 50% of it. If you wanna know more, let me know in the comments. Give me a follow. I make videos about M&A and buying and growing online businesses and amazing exits like this one.
