Emergency press conference time

Yesterday, two big things happened in the world of gambling and sports media:

• Penn Entertainment signed a $2 billion deal to create ESPN Bet, a sportsbook for audiences in the US. It’ll replace the Barstool Sportsbook.
• Penn sold its stake in Barstool to founder Dave Portnoy – who now reportedly owns 100% of the brand for the first time since 2016.

📝 Deal points: Not much is known about the price Portnoy paid for Barstool, but the deal does include him signing a noncompete, as well as a stipulation that Penn receive 50% of the gross proceeds should Barstool be sold in the future.

Much more is known about Penn’s deal with ESPN, which is the Disney-owned sports brand’s first foray into the gambling world.

• Penn will rebrand its current sportsbook to ESPN Bet later this fall in the 16 states where it’s licensed.
• ESPN will receive $1.5 billion in cash over the next ten years from Penn, as well as $500 million of warrants to purchase Penn stock.

📈 Behind the move: In a video posted to social media platforms yesterday, Portnoy framed the deal as a win-win-win. “We underestimated just how tough it is for myself and Barstool to operate in a regulated world,” he said.

Penn is now able to leverage the ESPN name, a less-controversial brand whose founder won’t send its stock price swinging. And when it comes to Barstool: “for the first time in forever, we don’t have to watch what we say, how we talk, what we do,” Portnoy said. “It’s back to the pirate ship.”