I'm fascinated with the Dave Portnoy angle to all this. He wasn't a good "fit" at Penn, but he drove billions in sales for them - which helped them parlay into the Disney deal. He got paid $500m for his company a few years back and now buys it back for $1. There's still a lot of "strings attached", like Penn gets 50% of proceeds in a future sale... but he's already claimed he wont be selling.
So is he a winner or a loser in all of this? I suppose it depends on how you value your "freedom" in exchange for millions of dollars.
It's actually a really complex answer. Yes, he did great work advertising for them, but there's a big difference between "Some guy over there advertising your product" and "Your employee advertising the product". The problem Penn had was that when they talk to regulators they can't say "We don't know that guy", so they constantly got in trouble with regulators and faced a lot more scrutiny because of the reputation of Dave. So it wasn't a match made in heaven, but also the ESPN deal is just such a big fish that no matter what given the opportunity Penn probably would've moved heaven and earth for ESPN.
Having said that, Sports betting is by far the biggest advertiser in the sports-media segment, so Penn have handed the company back to Dave and said "Oh, btw, you're not allowed your biggest source of revenue". It is undoubtedly going to be tough for Portnoy to make the economics work on a sports-media business without gambling advertising as a key revenue stream. Having said that, that's not necessarily what he cares about. He's rich, he's got his company back, he can say what he likes. If Barstool collapsed tomorrow I don't think he'd be happy, but he'd be producing new content within minutes.
Not sure he "drove billions in sales". Initial projections were to capture 15% or more of the US sports betting market but reality was somewhere around 3-5%. Major underperformer. There were certainly many problems with the product besides simply the brand but there's little evidence the brand was a net positive.
Great for Portnoy, he got the proceeds from a major "exit" (a few hundred million dollars) and he still owns the company.
> Penn’s “interactive” segment — consisting largely though not exclusively of its “online sports betting and casino app called Barstool Sportsbook and Casino” and its in-casino Barstool-branded retail sportsbooks — went from $121 million in revenue in 2020 to $663 million in 2022, and was up another 66% year-over-year in the first half of 2023, for a run rate of almost $1 billion.
Capturing market share != driving billions in sales. Especially in a highly competitive market.
You are attributing all of Penn's sports wagering revenue to Barstool. Penn owns more than a dozen casinos. Given the severe underperformance of the reality vs projections, many in the industry believed that the Barstool brand was a net negative to Penn's efforts.
If anybody believed that the Barstool brand was successfully bringing in revenue, some other bidder would have bought it from Penn. The fact that they abandoned it for nothing kind of tells you how much value Penn believed that it had.
So is he a winner or a loser in all of this? I suppose it depends on how you value your "freedom" in exchange for millions of dollars.