David Portnoy’s Future with Bartsool, Penn Entertainment in Limbo

Posted on: May 25, 2023, 02:29h. 

Last updated on: May 26, 2023, 02:41h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

David Portnoy is the face of Barstool Sports, the sports and entertainment media company he founded two decades ago. He’s not certain for how long that status will continue.

Penn Barstool
Barstool Sports founder David Portnoy, seen during an interview, above. His future with Penn Entertainment is up in the air. (Image: Politico)

Portnoy’s contract with Penn Entertainment (NASDAQ: PENN) is up in 20 months, and there are no guarantees the two sides will reach an extension. In February, Penn paid $388 million for the 64% of Barstool Sports it didn’t previously own, bringing the total acquisition price for Portnoy’s company to $551 million. In an interview on “The Kirk Minihane Show” earlier this week, Portnoy was ambiguous regarding his future with Penn.

There’s been some talk about it. Like you said [previously], who knows what they’re thinking at this point,” he told Minihane.

That interview occurred about two weeks after Portnoy took to Twitter to tell followers he added to his already large position in Penn stock. That tweet provided a temporary boost to the slumping shares. In a subsequent tweet, Portnoy asked his followers whether he should remain at Penn and show signs of overt support for the gaming company.

Portnoy/Penn Union Has Been Bumpy

Penn took its initial stake in Barstool Sports in 2020, hoping to leverage the brash, upstart media entity to build its online sportsbook and lure a younger, hipper clientele to its regional casinos.

While there are indications the deal paid dividends on the latter front, Barstool Sportsbook remains a bit player on the regulated sports wagering scene in the US. Additionally, the Portnoy/Penn marriage hasn’t always been harmonious. That much was on display when Barstool, at the behest of Penn, fired Poker player Ben “Mintzy” Mintz earlier this month for using a racial slur while reciting a rap song on air.

Portnoy and Barstool Sports CEO Erika Nardini openly disagreed with the decision. There have also been allegations of sexual misconduct against Portnoy, though he’s never faced charges in a criminal court. He’s also rankled some with his views on various issues of the day, including the Supreme Court’s 2022 decision to send abortion rights back to the states and, more recently, the collapse of Silicon Valley Bank.

Add it all up, and some analysts speculate that Penn could eventually sell or spin off Barstool Sports, and there’s speculation the pool of potential buyers would be larger if Portnoy was out of the picture. Conversely, there are analysts covering Penn who don’t’ view Portnoy as problematic.

Portnoy’s Post-Barstool Options

Should he ultimately leave Barstool Sports and Penn, Portnoy has plenty of options. In the interview with Minihane, he toyed with the idea of a podcast or spending some time out of the limelight.

He also mentioned the possibility of producing longer-form content, perhaps leveraging his famous pizza tastings into Anthony Bourdain-esque content.

“Like a pizza show on Netflix where you’re doing like 15 minutes a spot … I like doing it. It excites me. I think it’d be wildly successful … like [Anthony] Bourdain of what I’m doing,” Portnoy told Minihane.