Dave Portnoy bought back Barstool Sports for just $1… and PENN Entertainment is expected to post a loss of up to $850 MILLION on the deal

Barstool Sports founder Dave Portnoy paid just $1 to buy back the company, according to a new deposit securitieswhich estimates that PENN Entertainment will post a loss of up to $850 million in the deal.

Portnoy announced Tuesday that he had bought back the sports media company from PENN, which initially invested $163 million for a 36 percent stake by 2020.

PENN then bought the company’s remaining interests for $388 million more in February.

Portnoy is now back as sole owner of the company for the first time in nearly a decade, with PENN deciding to end its relationship with the company.

A majority stake in Barstool was acquired by The Chernin Group in 2016.

Portnoy founded Barstool Sports as a print publication in Boston in 2003

Reports at the time of the first PENN deal in 2020 indicated that The Chernin Group would retain their 36 percent stake in the company. It’s unclear if Chernin ended up selling their interest to PENN or if they sold it to Portnoy in this deal.

On how Barstool’s latest deal came about, Portnoy said, “We did this deal about three years ago, and I think both parties thought ‘we’re going to take this thing to the moon.'”

“We underestimated how difficult it is for me and Barstool to operate in a regulated world where gambling regulators, the New York Times, Business Insider agree with the share price. Every time we did something, it was one step forward two steps back.

‘My driver’s licenses have been refused. You name it. So the regulated industry is probably not the best place for Barstool Sports and the kind of content we create.”

“PENN has been able to close an incredible deal with ESPN. We wish them nothing but the best in their endeavors. It really is a win-win situation.’

When PENN chose to divest, the company agreed to a $2 billion deal with ESPN for the global leader to launch a branded sportsbook.

ESPN BET will launch in 16 states this fall.

As part of the deal, PENN will pay ESPN 1.5 billion over the next 10 years, according to a PENN press release.

PENN CEO Jay Snowden thanked Barstool for helping them grow their sportsbook

Portnoy, now 46 years old, is seen on a 2020 radio broadcast in Miami Beach

PENN will also grant ESPN warrants to purchase 31.8 million shares of PENN worth $500 million, which will vest over the same 10-year period.

“Barstool has been a great partner and we are grateful to Dave Portnoy, (CEO of Barstool) Erika Ayers, Dan Katz and their team for helping us rapidly scale our digital footprint across 16 US jurisdictions and for introducing their audience with our retail and digital products,” said Jay Snowden, CEO of PENN.

Portnoy was also delighted with the deal’s impact now that Barstool is no longer listed.

“More importantly, for us, for Barstool, for the first time in ages we don’t have to watch what we say, how we talk, what we do. It’s back to the pirate ship,’ he said.

‘By the way, I will never sell Barstool Sports (again), never. I’ll hold it till I die.’