When Barstool Sports announced last month that it was selling a major stake to casino operator Penn National Gaming, the leaders of the popular media brand said they planned to stay on for the long haul. According to new financial details, they have good reason to stick around.
Penn National chief executive Jay Snowden said in a conference call with Wall Street analysts Thursday that Barstool employees, including chief executive Erika Nardini, founder Dave Portnoy, and “Pardon My Take” podcast co-host Dan Katz, have signed long-term deals to stay with the company. Barstool was founded in Massachusetts and now has its headquarters in New York.
Penn National, based in Pennsylvania, owns Plainridge Park Casino in Plainville.
Snowden said some of Barstool’s talent is also being compensated with stock in Penn National, which aligns them with the future of the company that is paying $163 million for a 36 percent stake of Barstool ― and could own as much as 50 percent in three years. Their stakes will vest over time, Snowden said.
“I think they are incentivized, not just because of their employment agreements, but because of the Penn equity that they own to be around for the long term,” he said. “And that was very important to us, that this wasn’t just a quick cash transaction, and then we’re there holding what’s left of a media company that we don’t completely understand or know how to run yet.”
During the conference call, Penn National officials sounded giddy about the prospect of drawing in sports gamblers through the partnership with Barstool, which says it has 66 million unique users monthly. The company plans to offer online sports betting under the Barstool brand, and also use the partnership to promote gambling on sports and other products in its casinos.
The deal announced last month valued Barstool at about $450 million, but Snowden said he believes it is worth more. He said it has $100 million in annual revenue, is turning a profit, and has been growing substantially over the past two years.
The company has appealed to a young, male demographic with edgy humor and commentary on sports and culture. But it has also often drawn criticism for content some feel is inappropriate or offensive to women.
In an interview after the announcement of the deal, Portnoy said he expected that Barstool would have to be more careful discussing some issues related to gambling once it is associated with a heavily regulated gambling company. But he said the company’s philosophy would not change.
“We’re a comedy brand. We’ll be more aware of playing within the rules of engagement that are set,” he said then. "But we’re pretty confident that we can be our irreverent, funny selves. So I’m not worried about that changing at all. "
Andy Rosen can be reached at email@example.com.