Dave Portnoy buys Barstool Sports back for next to nothing, years after selling it

• Dave Portnoy has once again become the owner of Barstool Sports, the sports blog he founded in 2003.
• Portnoy bought the company stock back from Penn Entertainment after a deal initiated in 2020.

Dave Portnoy has once again become the owner of Barstool Sports, the sports blog he founded in 2003.

Penn Entertainment, a casino-and-sports-gaming company, finalized its acquisition of Barstool earlier this year in a $551 million deal after acquiring a minority stake in the sports blog in 2020 for $163 million.

"Penn Entertainment and Barstool Sports have gone our separate ways," Portnoy said in a video posted to X, formerly Twitter, on Tuesday. "So that is right, for the first time in a decade, I own 100% of Barstool Sports."

Penn and Barstool agreed to go their separate ways as the gambling operator signed a new 10-year deal with ESPN to rebrand Penn's existing Barstool Sportsbook as ESPN Bet this fall. Penn has agreed to pay ESPN $1.5 billion as part of the deal and $500 million in warrants tied to media, marketing, and other services from ESPN, according to the announcement.

Penn also drew tougher scrutiny from some regulators in the past few months because of its relationship with Barstool Sports, The New York Times and other outlets reported.

"Every time we did something, it was one step forward, two steps back," Portnoy said in his video announcement on Tuesday. "We got denied licenses because of me. You name it. So the regulated industry probably not the best place for Barstool Sports and the type of content we make."

A press release published Tuesday said that Penn sold 100% of the Barstool's common stock back to Portnoy "in exchange for certain non-compete and other restrictive covenants."

Penn also has the right to receive half of the gross proceeds received by Portnoy in any subsequent sale or other monetization event of Barstool, according to the terms of the deal.

Penn's relationship with Barstool hasn't been entirely smooth sailing. In May, Penn overrode Barstool executives when the company fired Ben Mintz, a poker player who said a slur while reading the lyrics to a song on a livestream. It happened during the same week as Penn's first-quarter earnings report, which missed Wall Street's estimates and caused stock to fall to its lowest level since May 2020, the Action Network reported.

Penn shares were up 14% in after-hours trading on Tuesday when it announced the new Barstool Sports and ESPN arrangements.

Representatives for Penn Entertainment and Barstool Sports did not immediately respond to requests for comment.