Penn Entertainment Inc. had high hopes for Barstool Sports when it bought the online media company in two deals totaling hundreds of millions of dollars.
Now, the regional casino operator is selling the business back to its controversial founder Dave Portnoy for just $1. Penn said Wednesday it will record a loss of up to $850 million on the transaction.
The unraveling of the Barstool relationship underscored the challenges a regulated casino company faced in partnering with a figure like Portnoy. In its place, Penn found a new, less problematic partner to tackle sports betting. On Tuesday, the company announced a $1.5 billion 10-year deal to use Walt Disney Co.’s ESPN brand for a new online betting app.
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