Portnoy Thought Penn Would Win Cosmo, Implies Bidding Process Wasn’t Fair

Posted on: September 30, 2021, 01:09h. 

Last updated on: September 30, 2021, 01:26h.

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

Barstool Sports founder David Portnoy was fairly certain Penn National Gaming (NASDAQ:PENN) would emerge victorious in bidding for the Cosmopolitan Las Vegas. But now he says the process to gain control of the plush Strip venue may not have been on the up and up.

David Portnoy
Barstool Sports founder David Portnoy said Penn National almost won the Cosmopolitan. He’s not convinced the bidding process was fair. (Image: Boston.com)

On Monday, private equity giant Blackstone revealed it’s selling the integrated resort for $5.65 billion to MGM Resorts International (NYSE:MGM) and a group of real estate investors. The latter consist of the Cherng Family Trust, Stonepeak Partners, and Blackstone Real Estate Income Trust (BREIT). MGM is paying $1.6 billion for operational rights, while the property investors are doling out $4 billion.

Early last month, when rumors regarding the sale of the Cosmopolitan intensified, Penn National was mentioned as a potential suitor. But that rumor pegged them as a darkhorse contender relative to Apollo Global Management (NYSE:APO) and MGM. However, Portnoy says there was a time when he was fairly convinced Penn would win the glitzy venue.

If you asked me at one point, ‘Were we going to have the Cosmo?’, I would have been, like, ’80 percent, yes,’” said the Barstool founder on the latest episode of the “David Portnoy Show with Eddie & Co.” “Every sign was saying we were going to get it.”

Penn, the largest regional casino operator in the US, owns 36 percent of Barstool, and can ultimately acquire the sports media property outright.

Shady Dealings?

Never one to hold back, Portnoy overtly said on his podcast that there “may have been shady (expletive) behind the scenes” explaining why Penn was left scorned.

 

Portnoy acknowledged that the deal makes sense for MGM, given that the company operates multiple venues near the Cosmopolitan. He also admits that he wasn’t intimately involved in the bidding, but adds he’s not convinced it was a fair process. He didn’t elaborate on the alleged shadiness.

After selling operating rights to Tropicana earlier this year, Penn no longer runs a Strip venue. Its Nevada roster consists of the M Resort in Henderson and Cactus Pete’s in Jackpot.

Portnoy didn’t divulge financial details regarding Penn’s offer for the Cosmopolitan. Nor did he say if the gaming company was teaming with real estate partners in its bid for the venue.

Used in the Hamptons

The Barstool boss goes on to say he may have been used this summer in the Hamptons by an unidentified person involved with the Cosmopolitan sale.

“There was a guy who was involved in the sale of the hotel who gave me a ride home from the East Hampton Airport to my house in Montauk,” said Portnoy. “He was acting like my best friend, taking pictures with me like we’re kids.”

Portnoy went on to say the unidentified male appeared to be a cheerleader for Penn winning the Cosmopolitan, and plied Portnoy for information on the deal. He didn’t say that the man worked for Blackstone, but he did say the person was involved with the group selling the integrated resort.

Portnoy adds the unknown person invited him on his boat, and that if this man runs into Portnoy in public again, it’d be best if he not introduce himself.