Posted on: February 12, 2024, 01:39h.
Last updated on: February 12, 2024, 01:39h.
Just minutes after the Kansas City Chiefs vanquished the San Francisco 49ers in the Super Bowl last night, Barstool Sports founder David Portnoy announced a widely announced partnership between his company and DraftKings (NASDAQ: DKNG).
Rumors regarding such a relationship surfaced about three weeks ago, but the two sides were prevented from making it official until after the big game due to Barstool’s non-compete agreement with Penn Entertainment (NASDAQ: PENN). That contract was struck 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 accord with ESPN.
I’m proud 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 terms of the Barstool/DraftKings agreement weren’t revealed, but it’s believed the arrangement could be worth upwards of $10 million over multiple years to Portnoy’s company.
Barstool, DraftKings Reunited and it Feels So Good
Barstool and DraftKings, both of which are Boston-born companies, worked together a decade ago with the media company serving as a platform for articles and discussion on daily fantasy sports (DFS), which was then DraftKings’ bread and butter.
That was four years prior to the Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA). That decision paved the way for states to determine 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 drove Barstool and Penn into each other’s arms in 2020 when the regional casino operator paid $163 million for a 36% stake in Portnoy’s company. Penn would ultimately pay north of $550 million to own Barstool outright before dumping it to work with ESPN.
Interestingly, that deal paved the way for Caesars Entertainment (NASDAQ: CZR) and DraftKings to move on from what were believed to be pricey 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 agreement with Meadowlark Media in 2021.
Portnoy Comes Out Ahead, Gets Back to Betting
Penn’s purchase of Barstool provided Portnoy with generational wealth and his ability to reacquire his firm for just $1 will likely assist in his efforts to add to his fortune because the company is likely worth hundreds of millions of dollars.
In the wake of the Penn divorce, Portnoy acknowledged that he may have hurt that operator’s efforts to procure 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 observers believe it was a gaffe on Penn’s part to hold Portnoy to such a short non-compete and an oversight to allow that requirement to end on the day of the Super Bowl.