Penn National Gaming invests $163 Million into Barstool Sports

Barstool Sports is no stranger to controversy.  The media outlet has been known to spark fierce debates all over social media.  Many people claim that they are a misogynistic and backwards company. Shannon Ho with NBC News reported that writers on Barstool adamantly sided with Antonio Brown in regard to his sexual assault allegations.  It was also reported that Dave Portnoy, the president of Barstool, threatened to fire employees immediately if they talked about unionizing. With that being said, they still seem to be a very profitable business asset.  According to Sahil Patel with Digiday, Barstool’s 25 podcasts brought in more than $15 million dollars in 2018.  

The business world seems to be taking notice and Barstool officially sold a majority ownership to Penn National Gaming in a $450 million dollar deal in January 2020.  Portnoy made a statement on January 29th via Twitter that is just as cringy as one could imagine.  It included the fake sunglasses that drop down from the top of the screen and anything else you would expect to find on your average TikTok video.  He justified the company’s transition into a primary sports gambling platform by reminding everyone that Barstool Sports was essentially the pioneers of gambling media.  It also included Portnoy calling out anyone who claims the company can’t “make it to the moon”. Their business model, which he references numerous times, claims that Penn National Gaming has the infrastructure while Barstool has the audience.  With sports gambling appearing to be spreading like wildfire all across the country within the next few years, they may be on the right side of history.

The History of Barstool Sports

Portnoy was not lying when he said that Barstool started as a sports gambling platform.  He started the company in the Boston area by selling fantasy and sports betting advice in 2003.  It wouldn’t be until 2007 that he would expand the operation onto the internet. He landed their first big deal with AOL in 2014 when they announced they would exclusively be airing Barstool content on their platform.  Portnoy continued to build the platform and got its first huge investment in 2016 when The Chernin Group bought a 51% majority stake. They allowed Portnoy to retain control over the platform and the creative content.

Is Barstool Getting Rid of their Old Platforms?

Barstool has come out in public stating they would not be getting rid of their content that isn’t related to gambling.   For now, all the fans of Pardon My Take, Call Her Daddy, and ForePlay do not have to worry about their favorite podcast being canceled.  Checkpoint XP writer Kevin Kelly told me, “[The deal] just allows them to make gambling their primary thing which will be pretty lucrative”.  He later went on to state, “If anything Barstool’s non gambling content will get bigger”. I must admit, I believe this to be a bold statement.  Portnoy’s over the top video seemed dismissive of regular content and seemed focused on a much different business model.

What Should We Expect from Barstool in the Future?

Portnoy dropped a bomb shell in his video that seemed to be a moot point to him.  He talked about opening bars, pizza places, and casinos. Those are massive projects and a lot to digest.  Where does Barstool plan to operate its businesses? Opening up restaurants is very complex. How do they plan to get a stable food supply chain?  Who is going to establish their baseline of food products? How are they going to differentiate themselves from similar services? These are all very pertinent questions that have gone unanswered.  I understand that Barstool was not going to explain their entire business model in one Twitter video by their head creator, but they did not seem to have a concrete plan in place at all. I am having a hard time grasping their vision without anything to base an opinion off of.  I haven’t even discussed the idea of opening a casino. That is a multibillion dollar operation. If they plan on operating in Vegas, I hope they have something unique to offer. I guess my main question after all of this is why? Why announce a massive platform change when no one was expecting it?  They have just been acquired by a big gaming company and these kinds of ideas should be developed over time. I am not going to be the first person to say that Barstool is destined for failure, but they just put a lot of undue pressure on their company. Everyone expects them to reach these benchmarks now.  They are attempting to enter an entirely new league. We will see how that goes.