PENN Entertainment has reported total revenues of $1.62 billion for Q3 2023, a slight decrease of 0.4% compared to the same period the previous year. The company also posted a net loss of $724.8 million, following the decision to sell the Barstool brand back to founder Dave Portnoy for $1.
Gaming revenue decreased by 5.0% during the three-month period, amounting to $1.25 billion, while revenue from food, beverage, hotel, and other services increased by 19.5% to reach $367.3 million.
The company divides its operations into five categories: Northeast, South, West, Midwest, and Interactive. The Northeast segment led in terms of total revenue, with $687.0 million, followed by the South segment at $308.2 million, Midwest at $293.4 million, and West at $135.1 million.
The Interactive segment posted revenue of $196.3 million, reflecting a 23.7% increase compared to Q3 2022. Additionally, the company reported $4.5 million in revenue from other sources and deducted $5.1 million in inter-segment revenue.
Operating costs rose significantly by 61.7% year-over-year, primarily due to the divestiture of the Barstool brand. This decision also incurred a loss of $923.2 million for the quarter. The move is part of PENN’s long-term strategy, as it plans to team up with ESPN for sports betting, in a deal worth approximately $1.50 billion.
Other major expenses included gaming costs of $709.0 million and general and administrative expenses of $406.4 million. In addition, the company reported $100.4 million in other expenses, mainly related to interest, resulting in a pre-tax loss of $886.8 million.
After accounting for $161.7 million in tax benefits and removing $300,000 in loss from non-controlling interests, PENN posted a net loss for the quarter of $724.8 million, contrasting with the $123.5 million net loss in the same period last year. However, adjusted EBITDAR remained positive at $445.1 million, though it decreased by 5.7%.
Under the agreement with ESPN, PENN will become ESPN’s exclusive sportsbook partner, effectively ending the broadcaster’s existing relationships with other operators. PENN’s existing Barstool sportsbooks will be rebranded as ESPN Bet on November 14, 2023.
Jay Snowden, CEO of PENN Entertainment, expressed enthusiasm about the collaboration with ESPN, stating: “This strategic alliance is expected to further expand our digital ecosystem and drive re-engagement with the millions of customers in our digital and retail databases, leading to compelling cross-sell opportunities.”
For the nine months ending on September 30, 2023, PENN reported total revenue of $4.97 billion, a 3.2% increase compared to the same period in 2022. Gaming revenue fell by 1.7% to $3.87 billion, while revenue from food, beverage, hotel, and other services increased by 24.5% to $1.10 billion.
PENN continued to emphasize the geographical diversity of its portfolio, highlighting strong results in locations such as Ohio, Kansas, Massachusetts, and Missouri. The company also noted the upcoming groundbreaking of four growth projects in November and December 2023, which are expected to create long-term shareholder value and enhance free cash flow generation upon their completion in late 2025 and early 2026.
Original article: https://www.yogonet.com/international/noticias/2023/11/03/69496-penn-entertainment-posts-7248m-loss-for-q3-following-barstool-divesture
