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Barstool lands a $450M valuation, thanks to a casino company

Thursday, January 30, 2020 by Robinhood Snacks |
_Wondering how many Stoolies showed up..._

Wondering how many Stoolies showed up...

Cue the Sweet Caroline playlist... Penn National Gaming shelled out $163M for a 36% stake in Boston-raised Barstool Sports. You've heard of Barstool, the sports-culture blog/video/pod-producer famous for "irreverent" content. You probably hadn't heard of Penn National, which operates casinos like Tropicana and Margaritaville — its shares soared 11% on the news. Here's the deal:

  • Barstool gets its valuation bumped close to half-icorn-worthy $450M (almost half a unicorn).
  • Penn gets exclusive rights to use Barstool's brand in its sports-betting products (which its casino biz is going in big on).
  • Barstool's founder (and fellow early employees) keep 28% ownership of the company.
  • FYI we figured out the formula to all Barstool merchandise:

[Insider fan joke] + [Silhouette of athlete] = Barstool t-shirt

It's all about the eyes (and ears)... Media companies boil down to one word: Audience. That's where the real value is for them (and their investors) — Barstool brings in nearly $100M in revenues annually.

  • Access: Since launching in 2003 as a Tom Brady-worshipping physical newspaper, Barstool hustled to build an audience of 66M "Stoolies."
  • Special Access: That audience is particularly likely to be into sports/gaming (62% of Stoolies bet on sports, and 44% of those gamblers do it at least 1x/week).
  • Brand: Penn wants more flat-brims in its life. "Sports betting attracts a new, younger demographic than traditional casino gaming." That's straight outta Penn's investment presentation deck.
  • Conversion: Penn is betting it can convert Barstool's audience into its casinos and sports-betting app better if it owns the content and can promote itself there.
THE TAKEAWAY

Brand is (almost) everything... Since the Supreme Court cleared the way for states to legalize sports betting (Jersey went in hard on this), the race for customers has been heated. Sports betting rivals like FanDuel and DraftKings lead thanks to their well-known logos sponsoring almost every arena bar area. To compete, Penn needs a popular sports-ish brand with a big and relevant audience. Barstool checks both boxes.