Penn Entertainment CEO Jay Snowden told CNBC’s Jim Cramer and CNBC’s Contessa Brewer that the only natural owner of Barstool Sports was David Portnoy, who founded the company in 2003.
Penn Entertainment, a gambling firm, announced Tuesday it would be divesting Barstool — selling the entity back to Portnoy — while entering a $1.5 billion deal with Disney‘s ESPN to launch a betting sportsbook.
“Dave Portnoy is the only natural owner for Barstool sports long term,” Snowden said. “They’re not a company and a brand, I think we all came to this conclusion, that should be owned by a publicly traded, highly regulated licensed gaming company.”
Snowden explained that the company realized its product was quickly becoming outdated by having to rely on a third-party platform. He added that he’s looking forward to a future in sports betting with ESPN.
“To Barstool’s defense — amazing partners — we didn’t spend, in the last year and a half, marketing dollars promoting Barstool Sportsbook, other than just the organic within Barstool ecosystem, because we didn’t have a product that we felt was strong enough to retain,” Snowden said. “We now have that, so this is great for Dave and Stoolie nation.”
Penn Entertainment stock was up more than 9% after Wednesday’s close, while rival DraftKings plunged past 10%. The ESPN deal marks the first time the brand will be on a sports betting platform, known as ESPN Bet. It will launch this fall in the 16 states where gambling is legal.
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