Taking full control
Penn Entertainment, formerly known as Penn National Gaming, has agreed to purchase the remaining outstanding shares in Barstool Sports. As a result, the casino company will have total control over the sports media organization.
Barstool will become a subsidiary of Penn
In a US Securities and Exchange Commission (SEC) filing on Wednesday, Penn confirmed it has exercised its call rights to purchase the outstanding shares by February 2023. After the deal is concluded, Barstool will become a subsidiary of Penn.
Specifics of the deal
To up its Barstool ownership to 100%, Penn has to meet certain conditions with a total cost of $387m. The two-part process will first see Penn pay $62m for 50% ownership. Then it must fork out an additional $325m for the other half.
Penn announced it had purchased 36% of Barstool in a deal worth $162.2m last year. Since then, the company has launched sportsbooks and online casinos through the Barstool brand. The casino company aimed to reach a younger audience through the acquisition.
David Portnoy started Barstool in 2003, initially launching the firm as a gambling-related newspaper in Boston. Over the years, it grew and developed into a producer of online videos, podcasts, and other content.
sexual misconduct allegations made against Portnoy
Although the company has proven successful, Barstool has encountered some issues due to sexual misconduct allegations made against Portnoy. While he has strenuously denied the claims, Indiana and Nevada gambling regulators have investigated Barstool as a result.
In March, Penn chief executive Jay Snowden said that the company remained in support of Portnoy.