Dave Portnoy’s Financial Moves Raise Questions Amid Barstool Sports Takeback

Dave Portnoy’s Financial Moves Raise Questions Amid Barstool Sports Takeback

Edited by: TJVNews.com

As Dave Portnoy regains control of Barstool Sports in a surprising $1 deal, recent financial moves have left some on Wall Street questioning his motives and financial stability, as was reported by the New York Post on Thursday. The skeptical view stems from Portnoy’s decision to significantly reduce the listing price of his Hamptons mansion just two weeks before agreeing to repurchase Barstool from gambling giant Penn National. The Post report noted that these actions, along with other recent transactions, suggest Portnoy might be in need of cash.

Portnoy initially listed his 5-bedroom, 5,700-square-foot mansion on Old Montauk Highway for $13 million last September, according to the Post report. However, at the end of July, he slashed the price to $10.5 million, signaling a notable markdown. Furthermore, the Post also reported that Portnoy recently sold 1.25 million Penn National shares for $30 million, a move that raises eyebrows about his immediate financial needs.

The $1 deal that allowed Portnoy to regain control of Barstool Sports from Penn National has been touted as a victory for him, with Portnoy having made around $100 million from the combination of deals involving Barstool, according to the Post report. However, recent financial data paints a different picture, as Barstool has reported losses of $16 million over the last six months.

Amid these financial maneuvers, speculations about the future profitability of Barstool have arisen, leading some to suggest that cost-cutting measures, including potential layoffs, might be on the horizon. As was reported by the Post, Portnoy’s candid remarks about his employees haven’t helped alleviate these concerns, further fueling doubts about Barstool’s financial prospects.

“I got the dumbest group of morons who ever lived … No wonder Penn gave it back to me for pennies on the dollar,” Portnoy wrote last week in an article headlined “How F***ing Brain Dead Are All My Employees.”

The details of Portnoy’s deal with Penn National also warrant attention. In exchange for Barstool’s media assets, which include a website and podcasts, Portnoy has agreed to non-compete clauses and other restrictive covenants. Additionally, the Post reported that he has committed to giving 50% of the proceeds from any future Barstool sale to Penn. While the exact terms remain undisclosed, this arrangement raises questions about the long-term financial implications for Portnoy.

“Penn got ‘schmuck insurance’ against Portnoy competing with them moving forward,” one banker told On The Money, according to the Post report. “They gave him the Barstool name back and he can’t say anything disparaging about them.”

“Portnoy sold half his name for the rest of his life,” one industry source told On The Money. “They could argue any other business he sells, they deserve to get half of it in perpetuity.”

Furthermore, Portnoy’s absence from the flourishing sports betting industry is noteworthy. While Penn National decided to offload Barstool, it retained Sportsbook, a valuable asset acquired from the Barstool purchase. The Post report indicated that Penn transformed it into a multi-billion dollar streaming agreement with ESPN, a move that boosted Penn’s stock by 25%. This comes in stark contrast to Penn’s previous difficulties securing a sports betting license in New York and its temporary license in Massachusetts, linked to concerns about Portnoy’s gambling habits.