Penn spent some $550 million on Barstool Sports. Dave Portnoy obtained it again for $1.

The sale value, disclosed in a regulatory submitting, got here as Penn pivots away from Barstool and the media firm’s on-line sports-betting platform, Barstool Sportsbook, for a cope with Walt Disney Co.’s
DIS,
-0.73%
ESPN to launch a brand new on-line betting platform this fall. Under that deal, Barstool Sportsbook, first launched in 2020, shall be rebranded as ESPN Bet.

Penn
PENN,
+9.10%
mentioned within the submitting that as a part of the trouble, the corporate entered right into a inventory buy settlement with Portnoy on Tuesday. In connection, it mentioned, “Penn sold 100% of the outstanding shares of Barstool to David Portnoy in exchange for a nominal cash consideration ($1.00 dollar) and certain non-compete and other restrictive covenants.”

Penn additionally mentioned that it has the proper to take half of the gross proceeds obtained by Portnoy in “any subsequent sale or other monetization event of Barstool.”

Penn mentioned it anticipated to e book a “pre-tax non-cash loss” of between $800 million and $850 million ensuing from the deal. The firm mentioned it expects to take that hit within the third quarter.

In response to a put up in regards to the gross sales value on X, the positioning previously referred to as Twitter, Portnoy posted a gif with the caption “1 Dollar Bob.”

The deal introduced Tuesday offers Penn the unique rights to the ESPN Bet trademark within the U.S. for 10 years, with a attainable 10-year extension on the desk. Penn pays $1.5 billion in money to ESPN over that 10-year 12 months time period and grant ESPN round $500 million of warrants to purchase round 31.8 million Penn shares.

Both Penn and Portnoy expressed respect for each other following the deal. Barstool’s gross sales and internet loss for the six months ended June 30, 2023 had been $80.9 million and $16.1 million, respectively.

Shares of Penn had been down 1.1% after hours on Wednesday.