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This was confusing to me too at face value. Based on the article this is what sounds like happened: 1. Penn acquires Barstool (the whole business) for $550M 2

This was confusing to me too at face value. Based on the article this is what sounds like happened: 1. Penn acquires Barstool (the whole business) for $550M 2. Penn decides ESPN Bet is a better brand for what they just bought 3. Portnoy wants the name back now that Penn doesn't need it 4. Penn sells him the brand for $1 on the condition that if he sells it to someone else they get 50%. So Portnoy gets a bunch of cash (from before) and the ability to restart Barstool's business and tech, Penn gets a turnkey app to call whatever they want, and gets a cut of future sales which at this point is just upside for them. Sounds like both parties came out ahead in their own way.

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onlyrealcuzzo 3y ago
> So Portnoy gets a bunch of cash (from before) Does he? Didn't VC invest $178M? https://www.crunchbase.com/organization/barstool-sports https://www.crunchbase.com/organization/barstool-sports And didn't Penn pay $388M?
- stuff4ben 3y ago
  388-178 is still a bunch of cash...
  - cududa 3y ago
    Most investments have a "ratchet" provision, where they get at least 2-3x their investment in a sale. Most of it probably went to investors.
  - onlyrealcuzzo 3y ago
    (388-178*y)*x Where y is the ratchet rate, and x is the percent Portnoy owned. He could have easily owned 20% of the company or less. Assuming no ratchet, that could still be well over $30M after taxes - but it's an order of magnitude away from $550M. And assuming a ratchet rate close to 2 - that's almost nothing - even if he owned 80% of the company.