In a move that signifies deeper ties to sports betting for the digital media publication, Barstool Sports has a new investor.
Penn National Gaming, a regional operator of casinos and racetracks, intends to acquire a 36% interest stake in the site worth about $163 million in cash and convertible preferred stock, according to the two partners.
That stake will increase to 50% with an incremental investment of about $62 million after three years, in keeping with the site’s current valuation.
Under this new arrangement, Penn National will be Barstool’s exclusive gaming partner for up to 40 years and is entitled to use the Barstool Sports brand to promote online and retail sports betting as well as iCasino products.
“They have the infrastructure; we have this rabid audience, this fan base, craving it,” Barstool Sports founder Dave Portnoy said in a video. “Together, we’re going to create an omnipresent approach to gambling.”
In the video, Portnoy teased Barstool-branded gambling arms like Barstool casinos, bars and restaurants “all fueled by the Barstool media engine,” and that the publication would continue to grow. He encouraged followers to buy stock in Penn National, a publicly traded company.
Penn National didn’t return requests for comment about whether there would be changes to staffing levels or the executive team of Barstool as part of its investment. Barstool also didn’t respond to requests for comment.
Barstool has already capitalized on the Supreme Court’s decision to grant states the ability to allow sports betting and has its own betting platform, Barstool Bets.
Barstool’s new investment comes during a time when a number of sports media titles are trading hands, including Derek Jeter’s The Players’ Tribune, which sold to Minute Media, and new ownership at Sports Illustrated that led to mass layoffs at the magazine.
After the deal, which is expected to close in the first quarter, Barstool’s owner The Chernin Group will retain a 36% interest in the company, while 28% will be held by Barstool employees including Portnoy and CEO Erika Nardini.
“With its leading digital content, well-known brand and deep roots in sports betting, Barstool Sports is the ideal partner for Penn National and will enable us to attract a new, younger demographic, which will nicely complement our existing customer database,” said Jay Snowden, president and CEO of Penn National, in a statement.