Benzinga - by Chris Katje, Benzinga Staff Writer.
A rumored partnership between sports media company Barstool Sports and sports betting company DraftKings Inc (NASDAQ:DKNG) was confirmed Sunday after the conclusion of Super Bowl LVIII.
Here are the details.
What Happened: A recent report suggested that Barstool Sports is renewing its media partnership with DraftKings, following the repurchase of the sports media firm by its founder, Dave Portnoy, from PENN Entertainment (NASDAQ:PENN).
"Breaking News: I'm proud to announce that Barstool has signed a multi year monster deal with DraftKings. We're back to our roots. DK is once again the exclusive sports betting partner of Barstool Sports," Portnoy tweeted.
A video shared by Portnoy brought flashbacks to 2014 when Barstool Sports partnered with DraftKings 10 years ago
"I just bought my company back for $1," Portnoy says in the video.
A separate video shared by Portnoy Monday highlighted a Free Throw Challenge featuring himself and other Barstool Sports members, which is accompanied by a $100,000 prize free-to-play challenge from DraftKings.
The Free Throw Challenge kicks off at 5 p.m. ET and will feature Portnoy and other Barstool employees attempting to make 41 straight free throws, which is the NBA record.
Rules for the challenge include having 75 mulligans to use, having to select five other people to participate in each round and Portnoy being the person to attempt free throws 15, 30 and 41 in each round.
Portnoy said the challenge could take five hours, ten hours, or may never finish. Video footage showed several air balls from Portnoy.
"We're gonna be here forever," Portnoy said. "This is getting embarrassing."
Related Link: Disney CEO Bob Iger Says ESPN Bet Had Multiple Suitors. Here’s Why Penn Entertainment Won The Rights.
Why It's Important: The report linking Barstool Sports to a deal with DraftKings was previously reported by Sportico. Under the terms of Barstool's deal with Penn, it was believed that a new sports betting partnership could not be signed until after the conclusion of the 2023 NFL season.
Less than one hour after Super Bowl LVIII, Barstool Sports and Portnoy made the announcement.
Many in the sports betting sector were surprised to learn that Barstool's non-compete with Penn would be one year or less from the time Portnoy re-acquired the company.
Penn paid $163 million for an initial 36% stake in Barstool Sports, before acquiring the remaining 64% for $388 million, paying a total of over $500 million. The company later sold Barstool Sports back to Portnoy for $1 when it moved on to the ESPN Bet partnership.
Penn reported an $850-million write-off on its Barstool acquisition.
Penn signed a deal with The Walt Disney Company (NYSE:DIS) to license the ESPN brand and launched ESPN Bet in 17 states in November.
ESPN Bet has had strong initial success including a third-place market share finish in Pennsylvania in December. The sportsbook spent heavily on promotions, which could help its market share gains from previously being the Barstool Sportsbook brand.
DraftKings and FanDuel, which is owned by Flutter Entertainment (NYSE:FLUT), have dominated the online sports betting sector with the top two market share positions and several companies battling it out for third place and beyond.
Barstool Sports linking up again with DraftKings for content could help bring new customers to the sports betting giant, or bring some bettors over who were previously using Barstool Sportsbook/ESPN Bet from Penn.
The free throw challenge could go viral quickly, given past Barstool Sports challenges like a virtual golf hole-in-one challenge that was watched by thousands online and drew attention from athletes and celebrities.
DKNG Price Action: DraftKings shares are down 1% to $42.75 on Monday, versus a 52-week trading range of $15.56 to $44.03. Shares of DraftKings are up over 160% over the last year.
Read Next: Dave Portnoy Welcomes Back Full Ownership Of Barstool Sports, Calls Penn-ESPN Deal Win-Win: ‘I Am Never Going To Sell'
Photo by Zach Catanzareti Photo via Wikimedia.
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