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Penn Entertainment set to close purchase of Barstool Sports by February 2023

Sports reporter Josh Schafer joins the Live show to break down the timeline for sports betting giant Penn Entertainment to finalize its purchase of media company Barstool Sports.

Video Transcript

JOSH SCHAFER: Well, it's always interesting to see where these companies spend, right, and where they kind of diversify. And that's my play today with Penn Entertainment. Shares are up marginally on the day on the news, but they're going to be completely buying Barstool Sports. So this acquisition started in 2020, and they'll be finishing it in 2023. They'll have spent about $550 million shy to buy Barstool Sports.

Obviously a main part of that is they operate the sportsbooks through that, guys, right? So they bring in the promotions with some of their favorite personalities, like a Dave Portnoy or Barstool big cat. And they make it so you can bet with them. They have these shows. They're very popular. And they get them in on social media. And then they make it so you can bet with them.

Another interesting part of this move for me, though, you're getting the podcast network that sells a lot of t-shirts, that has the merchandise. A little bit of a diversification move away from the sportsbooks as well. They have the number one sportscast on Apple with "Pardon My Take," four of the top--

DAVE BRIGGS: That is the number one--

JOSH SCHAFER: Number one sportscast.

DAVE BRIGGS: --sportscast on Apple.

JOSH SCHAFER: Sports podcast. I looked this morning.

DAVE BRIGGS: Ahead of everything at ESPN.

JOSH SCHAFER: And they have four of the top 30 podcasts in the sports section on Apple.

SEANA SMITH: Wow.

DAVE BRIGGS: Wow, that is remarkable.

JOSH SCHAFER: You gotta think they get revenue that way, too.

DAVE BRIGGS: And they are certainly thrilled to see Massachusetts come online as sports gambling as the 36th state. How significant is Barstool in that space, in the sports gaming space, though?

JOSH SCHAFER: So that's one thing that I've sort of followed, right, is we kind of follow these big four, I would call it. You have FanDuel, you have DraftKings, you have Caesars. Those are--

DAVE BRIGGS: FanDuel with 51% of the space.

JOSH SCHAFER: Right, and those are the big three. And then you get BetMGM that comes in as well. And then Penn's kind of lagging behind. And that was something I was talking to a managing director today, Joel Simkins. And that was something he pointed out to me. He said, does this help get Penn get more market share? That's the big question. Can they start getting more market share in some of these other markets?

SEANA SMITH: You would think, though, just because they have such a massive following, I guess, just in terms of getting more eyeballs, if you have Portnoy continuing to bump Penn National, you would think that would eventually help them.

DAVE BRIGGS: In particular, it helps them get younger. And that's certainly what they wanted to do with this. And the entire space is watching one state. And that is California. Can they get California to come online? We shall see soon. My guess would be yes.