Editor Note: ‘Early Entrants’ is a series of sports business ‘rumblings’ before the news breaks.
On Friday (11.1), The Big Lead published a piece entitled ‘Chernin Group Exploring Sale of Barstool Sports’ claiming that talks between the controversial merch company/podcast operator and an unnamed “gambling operator” were in “advanced stages.” JohnWallStreet does not believe that to be the case. In fact, we sniffed around the rumor for nearly a week before TBL ran their piece.
While it’s clear that Barstool has had dialogue with multiple parties about a sale (as Dave Portnoy has since acknowledged), one gaming industry insider told us there’s nothing to new report; “Chernin has been looking to move that for a while.” A second source on the private equity side said, “Chernin ran a process and had no takers at its price. But Barstool is ‘generally’ for sale.”
As for a potential acquirer, a gaming co. makes sense because the Barstool Bets product could be used as an acquisition funnel and it would give Chernin the most lucrative exit opportunity, but one source with a regulatory background said he/she would be “shocked [if a sports betting company got into the Barstool business]. There are so many issues – including licensing – that would put them under far too much scrutiny.”
For what it’s worth, JohnWallStreet hears that Barstool has reached break-even; with revenues in the +/- $100 million ballpark.
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