Jim Cramer on Barstool and Penn National's $163 million sports-betting partnership
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- Published on: Wednesday, January 29, 2020
- CNBC's Jim Cramer chats with Penn National Gaming CEO Jay Snowden and Barstool Sports founder David Portnoy and CEO Erika Nardini about their plans to penetrate the emerging sports betting market.
Barstool Sports founder David Portnoy told CNBC on Wednesday he has his eyes set on owning a sports team after the sports and pop culture blog landed a nine-figure partnership with Penn National Gaming.
The deal “is so big, I’m trying to get to, like, buy [a] sports team-type mogul,” he said in an interview with Jim Cramer, appearing alongside Barstool CEO Erika Nardini and Penn National CEO Jay Snowden on “Mad Money.”
Portnoy did not say what kind of sports team or professional level he would like to gain ownership in, but he is placing a bet that the partnership makes progress toward that goal.
“This is hopefully what’s going to take us there. I believe in it a million percent,” he said.
Penn National, an operator of 41 casinos across 19 states, inked a partnership worth $163 million with Barstool Sports. The deal gives Penn National a 36% stake in Barstool — with future options — as the company looks to capitalize on the emerging sports betting scene across the United States.
Twenty states have legalized sports betting in recent years, and the number could keep growing. The activity could be a revenue booster for states when gamblers are allowed to wager on sporting events. Wall Street players are keeping a watchful eye on the expanding market’s prospects. The Supreme Court in 2018 struck down a federal law that banned sports betting in most places.
The purpose of the venture is to help Penn National, whose typical patron is in their mid-50s, penetrate into a younger demographic with the help of Barstool-branded offerings. The digital sports media company, whose audience is primarily in the 20s to 40s age range, will launch a sportsbook app ahead of the start of the NFL season later this year, sell sportsbooks at retailers in states where the activity is legal and open Barstool Sports bars across all of the casinos properties, Snowden said in the interview.
“They have the brand. They have the fan base. We have the infrastructure, and it really makes a lot of sense,” he said.
Barstool in turn will promote Penn National’s casinos on its platform. The media company will retain editorial control of its content. Barstool started out in 2003 as a gambling and fantasy sports newspaper and was last valued at $100 million in 2018, according to Jefferies Gaming analyst David Katz.
Nardini, a former AOL executive hired to lead Barstool in 2016, revealed that it plans to build One Bite pizza bars and restaurants as part of the deal. One Bite is Barstool’s pizza-reviewing app where Portnoy registered his thoughts about pizza parlors.
Penn National is the “right partner for us,” Nardini said.
“They had all the things we wanted. They wanted the Barstool Sports brand. They had the largest retail footprint in the United States,” she explained. “They have a great management team and they have a shared vision of winning in sports betting, which was something Dave’s thought about for a long time and we were very committed to as a company.”
Penn National stock surged nearly 11% during the trading day to close at about $29 per share.
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