Dave Portnoy, the creator of Barstool Sports, repurchased his business for $1

According to a regulatory document released late on Wednesday, Barstool Sports founder Dave Portnoy paid Penn Entertainment (PENN) $1 to repurchase his media brand.

The sale follows Penn’s Tuesday announcement of a $2 billion sports betting agreement with ESPN. ESPN Bet will replace Barstool Sportsbook as the moniker of Penn’s mobile online sports book starting in the autumn.

In 2019, Penn initially paid $163 million for a 36% share in Barstool. The business invested an additional $388 million earlier this year to purchase the balance of Barstool.

In a filing on Wednesday, Penn stated that it might potentially lose up to $850 million on the transaction. Should Portnoy ever sell or otherwise monetize Barstool in the future, the company also retains the right to receive 50% of the profits. In the beginning, Penn intended to leverage Barstool’s content division to help advertise its sportsbooks to a younger demographic. When the operator sought for sportsbook licenses, the relationship with Barstool raised regulatory issues, and the Portnoy dispute finally hurt the stock price.

We did this deal about three years ago, and I think both parties were like, ‘We’re going to take this thing to the moon,'» Portnoy said Tuesday.

«And I think we underestimated how tough it is for myself and Barstool to operate in a regulated world where gambling operators, the New York Times, [and] Business Insider hit pieces [are] f****** with the stock price. Every time we did something it was one step forward, two steps back,» Portnoy added.

Disney CEO Bog Iger responded that the business had «been in discussions with a number of entities over a fairly long period of time» seeking a sports betting arrangement at ESPN when questioned about ESPN’s agreement with Penn on a teleconference later on Wednesday.

Iger continued, «[Penn] came forward in a very aggressive manner and presented an offer to us that was by far superior to any of the other offers. «And we like that [Penn] will use this as a growth engine for their business,» the statement continued.