Barstool Sports, a popular media brand that has sometimes faced criticism because of its personalities’ provocative commentary, is selling a stake in itself to Penn National Gaming, the large gambling company that operates Plainridge Park Casino in Plainville.
Penn National said Wednesdaythat it has agreed to pay about $163 million for a 36 percent stake in Barstool Sports, which was founded in Massachusetts in 2003. The move comes as many gambling companies are looking for ways to get into sports media, which they see as a way to attract young customers in the growing sports gambling industry.
The deal values Barstool Sports at about $450 million. It also provides for Penn National to up its stake in Barstool Sports to 50 percent in three years, for an additional payment of about $62 million.
Barstool, now based in New York, has built a huge audience — it says it has 66 million monthly unique users — with a mix of edgy sports and culture commentary, videos, and podcasts. The site’s offbeat, blunt humor has appealed to a young, male demographic that advertisers and partners covet. But it has also attracted critics who say some of its content can be demeaning toward women.
Executives with both companies said in an interview Wednesday that the tone of the site will not change substantially with Penn National as a part owner. Founder David Portnoy, who has remained the primary face of the site, and chief executive Erika Nardini will remain in their roles.
Portnoy said the organization will have to take an added level of care when discussing issues related to the heavily regulated gambling industry. But he believes the editorial mix will remain familiar to its fans.
“We’re a comedy brand. We’ll be more aware of playing within the rules of engagement that are set,” he said. "But we’re pretty confident that we can be our irreverent, funny selves. So I’m not worried about that changing at all. "
Penn National said it will add the Barstool name to as many as 20 casino sportsbooks in states including Pennsylvania, Michigan, and Illinois by the end of the year. Barstool writers and commentators will make appearances at Penn properties, creating events to draw a younger audience.
A new Barstool-branded betting app will be in place by the start of the next National Football League season, the company said.
Barstool, which began as a newsletter with a heavy focus on gambling, has become a polarizing brand as it has expanded the scope of its content.
In late 2017, ESPN canceled a show hosted by some the site’s personalities following social media complaints that Barstool’s content was insulting to women. The site has a daily feature with photos of a scantily clad woman, and in the past rated the attractiveness of teachers who were charged with having sex with their students.
The company recently reached a settlement with the National Labor Relations Board to delete tweets in which Portnoy threatened to fire people who talked to union activists.
Penn National, based in Wyomissing, Pa., operates 41 gambling sites across the country, including the Plainridge Park slots casino.
Penn National chief executive Jay Snowden said in an interview that he hopes Barstool Sports will help Penn National attract people to its casinos as well as its sports betting offerings. He noted that the clientele at Penn National casinos skews older than Barstool’s audience, but he believes that together the companies can entice younger consumers.
“We were missing what Barstool had, but wanted to figure out how we could be big players in sports betting,” he said. “And Barstool was missing what we had, which is a physical presence, and licenses across the US — basically the infrastructure and operations experience.”
Sports betting remains illegal in Massachusetts, as lawmakers debate proposals to legalize it at the urging of Governor Charlie Baker.
The deal follows other media-betting partnerships, including an online sports-wagering venture that Fox Corp. launched with the parent of PokerStars, and ESPN’s partnership with Caesars Entertainment Corp. to open a TV studio for betting fans in the Linq casino in Las Vegas. The Boston-based sports betting and Daily Fantasy Sports firm DraftKings last September announced an editorial partnership with Vox Media’s SB Nation.
The sale also represents a profitable partial exit from Barstool for Hollywood executive and investor Peter Chernin, who acquired a majority stake in the business in 2016 in a deal that valued the company at between $10 million and $15 million.
Entities affiliated with his Chernin Group will own 36 percent of Barstool after the deal, with the remaining 28 percent held by Barstool employees.
The deal is expected to close during the next few months.
Penn National stock ended the day up more than 10 percent.
Material from Bloomberg was used in this report.