Thoughts

Andrew Miller

August 13, 2023

The Penn Gaming-ESPN-Barstool Deal: A Lesson in Strategy

There are lessons to be learned from this week’s Penn Gaming-ESPN-Barstool deal that apply to domain names, entrepreneurship, and business strategy. Quick recap. Penn acquired Barstool for $551 million, an important deal that successfully put them on the map and drove the stock. This week, Penn sold 💯 % of Barstool back to founder Dave Portnoy for a reported $1. This was because Penn traded up and went all in on a massive partnership with ESPN, owned by Disney. Disney was not OK with Barstool’s ways, so Penn quickly cleared the way. Many may have lost this deal trying to negotiate, but Penn moved swiftly, and even Portnoy sang their praises. They negotiated a smart clause, though.

While they don’t own equity, they get 50% of any future exit of Barstool. It’s a structure I have used often, and it works. It is a lesson for investors, founders, and domain name buyers and sellers that sometimes it’s OK to give something up at less than you originally intended to trade up for a better opportunity.

Representing the Best Digital Land

Between the portfolio of the most valuable brands and domain name assets that we are overseeing at Hilco Digital Assets, HilcoDigital.com/domains, and via our investment in Squadhelp, we arguably represent the best digital land on planet Earth.

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