Penn National Gaming (PNG) has finalised its acquisition of a 36% stake in digital sports media company Barstool Sports for a total consideration of approximately $163m.
Announced last month, the acquisition forms part of a wider agreement between the two parties, which also included PNG becoming Barstool’s exclusive gaming partner for up to 40 years.
In addition, PNG secured the sole rights to utilize the Barstool brand for all of its online and retail sports betting and online casino products.
PNG, which runs 41 gambling facilities across 19 US states, funded the purchase using $135m in cash and $28m in non-voting convertible preferred stock.
Chris Rogers, senior vice president and chief strategy officer at PNG, as well as Jon Kaplowitz, senior vice president of interactive gaming at PNG, have both been added to Barstool’s board of directors as part of the deal.
Following the completion of the acquisition, entities affiliated with The Chernin Group now own approximately 36% of Barstool, with the remaining 28% being held by Barstool’s current and former employees.
However, the deal also states that PNG will increase its ownership in Barstool to approximately 50% after three years, with a further incremental investment of $62m.
“Since announcing our ground-breaking partnership with Barstool at the end of January, we have seen first-hand the power of the Barstool brand to generate significant consumer interest and increased engagement between Barstool, their loyal audience of ‘Stoolies’ and our own nationwide platform of 41 properties in 19 states,” PNG president and chief executive Jay Snowden said.
“Our two teams have hit the ground running and are working on plans to roll out the Barstool sportsbook brand through both our retail sportsbooks and our interactive products.
“In addition, our interactive product development team is continuing its work towards the launch of our new sports betting app which is planned for August.”
Shortly after announcing the initial agreement, PNG reported a 53.1% year-on-year decline in net income for 2019 despite seeing a 47.8% increase in revenue for the year.
Total revenue for the 12 months to 31 December 2019 amounted to $5.30bn, up from $3.59bn in the previous year following PNG’s acquisition in 2018 of Pinnacle Entertainment, a transaction that expanded the company’s portfolio by a further 40 sites.
However, higher spending pushed net income down by 53.1% from $93.5m to $43.9m, with income before tax also slipping from $89.9m to $86.1m.