HG Vora Nominates Three Board Candidates for Penn Entertainment, Criticises “Reckless Spending”
Investment firm HG Vora, based in New York, has nominated three candidates for the board of Penn Entertainment, accusing the company’s leadership of preventing it from reaching its full potential.
In a statement issued on 29 January, HG Vora claimed that Penn’s management had spent nearly $4 billion on acquisitions and media partnerships in what it described as a “reckless” manner. The firm criticised Penn’s interactive strategy as a “complete failure” and argued that previous commitments had not been fulfilled.
As a result, HG Vora, which holds a 4.8% stake in Penn, has put forward William J. Clifford, Johnny Hartnett, and Carlos Ruisanchez as board candidates.
The Nominated Candidates
- Johnny Hartnett: Former CEO of Superbet, previously held executive roles at Flutter-owned Paddy Power Betfair and Sportsbet. He also played a key role in Flutter’s acquisition of FanDuel as Chief Development Officer.
- William J. Clifford: Former CFO of Penn National Gaming, a position he held for 12 years until 2013. He has since served as a senior advisor for Gaming and Leisure Properties.
- Carlos Ruisanchez: Co-founder of Sorelle Capital and Sorelle Hospitality. He was CFO of Pinnacle Entertainment for five years until 2018, when he founded Sorelle. During his tenure at Pinnacle, he played a significant role in the company’s acquisition of Ameristar in 2013. Penn acquired Pinnacle in 2018 for $2.8 billion.
Penn’s Shareholder Meeting and Financial Performance
The nominations will be voted on at Penn’s 2025 annual general meeting, for which a date has yet to be set. Shareholders are not required to take any immediate action.
Parag Vora, founder and portfolio manager of HG Vora, stated:
“To date, there have been no consequences for the board’s repeated poor judgement and disappointing shareholder returns. We believe this is partly due to Penn’s weak corporate governance, which strips shareholders of influence and grants board members disproportionate power while excessively rewarding the CEO.”
Penn reported a net loss of $36.7 million in the third quarter of 2024, a significant improvement from the $724 million loss in the same period the previous year. The 2023 losses were largely attributed to the sale of the Barstool brand back to its founder, Dave Portnoy, for $1.
For the first nine months of 2024, Penn recorded revenue of $4.9 billion, down from $4.96 billion the previous year. The net loss for the period rose to $178.2 million, compared to $131.9 million in 2023.
Penn is set to release its full-year 2024 financial results on 27 February.
ESPN Partnership and Board’s Response
In 2023, Penn entered a $1.5 billion partnership with Disney-owned ESPN to launch ESPN Bet. The service went live in Washington, D.C., in January and now has market access in 20 U.S. states.
Penn’s board responded to HG Vora’s nominations with a statement reaffirming its commitment to “creating long-term value for all shareholders.” The board stated that it will review the proposed candidates before issuing a formal recommendation in filings with the U.S. Securities and Exchange Commission ahead of the 2025 shareholder meeting.