David Portnoy Claims Penn Licenses Were Denied due to Him, Refuses to Sell Barstool
The world of media and sports gambling partnerships underwent a significant transformation yesterday, as ESPN and Penn Entertainment (NASDAQ: PENN) unveiled an accord. According to this arrangement, the casino operator will pay a substantial sum to obtain the rights to utilize ESPN Bet. Barstool Sports, on the other hand, was excluded from the arrangement.
Penn repurchased 100% of Barstool Sports from its founder, David Portnoy, as part of this 10-year agreement. The company will invest $1.5 billion in ESPN, with the potential for the network to own up to a quarter of its outstanding shares. Penn acquired the remaining stake in Barstool Sports for $388 million in February, making the total acquisition cost $551 million.
In the announcement, Penn did not provide any information regarding its relationship with Portnoy or Barstool Sports. Instead, Portnoy revealed the difficulties faced by his company while operating in the regulated gaming industry. He claimed that Penn's ties to him resulted in denials of sportsbook licenses in certain states.
"We underestimated just how hard it is for me and Barstool to operate in a regulated world where gambling regulators, New York Times, Business Insider, hit pieces are messing with the stock price. Every time we took a step forward, we took two steps back. We got denied licenses because of me," Portnoy stated during one of his famous "emergency press conferences."
Portnoy didn't disclose specific states where Barstool Sports faced rejections for licenses. He also added that the regulated betting industry "probably isn't the best place" for his company and its culturally relevant content.
Potential Challenges in Penn-Portnoy Relationship
The financial details of the deal between Penn and Portnoy remain undisclosed. However, Penn will retain 50% of the proceeds should Portnoy decide to sell or monetize his company in the future.
Since 2016, when The Chernin Group gained a majority stake in the company, Portnoy has once again become the sole owner of the Boston-based firm he established 20 years ago. Over the past three years, Penn has mostly remained silent about Portnoy's various controversies, including his sexual interests and comments on various topics.
Analysts analyzing the gaming industry were divided in their opinions on how much of Portnoy's questionable behavior Penn could tolerate. While it's unclear, there might have been a breaking point in May when Portnoy dismissed Ben "Mintzy" Mintz for using a racial slur while reciting a song on air.
Portnoy initially wanted to keep Mintz onboard, but it's rumored that he caved to Penn's pressure to fire the on-air personality to avoid potential issues with regulators.
What's Next for Portnoy and Barstool Sports?
Portnoy expressed no ill feelings toward Penn during the press conference and insisted he would keep his shares in the casino company, due to his large stock position and belief in potential stock price growth.
It remains unknown whether Portnoy has plans to sell Barstool Sports but clarified that he intends to focus on "content, content, content."
Channelling Al Pacino in Godfather III, Portnoy noted, "Every time I think I'm out, they pull me back in."
Read also:
- Drivers in North Rhine-Westphalia need to be aware of certain aspects when refueling in other countries.
- What's making the Bayern leader appear so anxious?
- Most supporters desire Neuhaus to remain with the team.
- The referee for the upcoming cup final has been declared.
Source: www.casino.org
