June 6, 2025, 04:18h.
Endorsement of HG Vora by ISS in Controversy over Penn Entertainment's Board of Directors
Last updated on: June 6, 2025, 04:18h.
The Great Boardroom Battle: HG Vora vs. Penn Entertainment
- *ISS and Egan-Jones line up with HG Vora in Penn's boardroom brawl
- *Shareholders face controversial options: the board's proposal or HG Vora's 'Gold Card'
Institutional Shareholder Services (ISS) and Egan-Jones, two heavyweight proxy advisory firms, have waded into Penn Entertainment's fiery boardroom battle, aligning themselves with HG Vora Capital Management. A call to shake up Penn's board of directors is setting the stage for an explosive annual meeting on June 17.
This confrontation pits HG Vora, a feisty activist investor holding approximately 4.8% of Penn Entertainment's stock, against the regional casino operator. HG Vora's argument centers on poor strategy, governance failures, and the mismanagement of the company. Specifically, they have slammed Penn's hefty transactions such as the purchases of Score Media and Gaming, Barstool Sports, and the licensing agreement with ESPN[3][5].
As tension brews, investors will vote on either the board of directors' proposal or what HG Vora calls the "Gold Card" option. Penn did approve the nominations of HG Vora candidates Johnny Hartnett and Carlos Ruisanchez, yet they are displeased that William Clifford – HG Vora's third candidate – was left out.
Joining Egan-Jones in supporting the third horse in the race, ISS believes it’s bloody obvious that change is essential on Penn's board[1][2]. They assert there’s little evidence showing the board has managed to rein in management. Worrisome indicators? Missteps in acquisitions and partnerships since early 2020 that have flopped to the financial chagrin of shareholders, and failed to meet the company's own lofty goals[1].
ISS also tore into Penn for a series of blunders in the online sports betting sector, most of which involve botched acquisitions that don't deliver acceptable returns for shareholders. Frustratingly, it seems the board has forgotten to learn from their previous mistakes.
That narky comment may well refer to Penn’s questionable dealings: the buying of Barstool Sports, theScore, and their investment in ESPN to capitalize on the brand's online sportsbook[1]. These loose change decisions could sink Penn a whopping $4.5 billion, more than double the company's current market cap. And despite the big bucks splashed on these investments, they haven't earned their respective keep. Barstool was sold back to its founder in 2023 for a mere bag of peanuts, and analysts suggest that ESPN Bet and theScore could go the same way[1].
The Case for Clifford the Boardroom Crusader
A seasoned gaming industry vet with three decades of experience, William Clifford was once the CFO at Gaming and Leisure Properties - the real estate investment trust (REIT) spun off from Penn in 2013[1][2]. A possible Clifford-shaped hole on the board had been attempted to be filled in 2020, but the company declined, citing reluctance to dive headfirst into tech-fueled changes led by Jay Snowden. Last month, Penn finally explained why they didn't want Clifford on board: his skills and experiences weren't considered 'additive' or 'complementary' to the current board and he 'failed to demonstrate the required open-mindedness necessary for exploring innovative solutions'[1][2].
ISS, however, believes Clifford's got what it takes. They argue that Clifford's gaming experience is gold, and his presence could provide a much-needed contrarian voice to a board that's been either unable or unwilling to rein in management.
"... a director who isn't afraid to offer a dissenting perspective might be a valuable addition. There's no apparent reason why support for Clifford would be unwarranted at this critical juncture."[1][2]
Egan-Jones Comes to the Rescue
Earlier this week, Egan-Jones, best known for its credit ratings, announced its support for HG Vora[3][5]. Their reasoning? Penn chopping the number of board seats that were supposed to be open for grabs this year to just two, and their questionable corporate governance practices, including a staggered board and plurality voting, which hinder investor rights and contribute to lackluster financial performance[3][5].
With ISS and Egan-Jones on their side, HG Vora is gearing up for an epic fight against Penn Entertainment. Better grab your popcorn - this annual meeting promises to be a barn-burner!
- The strategic alignment of Institutional Shareholder Services (ISS) and Egan-Jones with HG Vora Capital Management signifies a significant financial investment in Penn Entertainment's gaming business, as they collectively advocate for change in the company's board.
- The financial consequences of Penn Entertainment's acquisitions, such as the purchases of Score Media and Gaming, Barstool Sports, and the licensing agreement with ESPN, have raised concerns among shareholders and financial advisors, who argue that these deals have failed to deliver acceptable returns.
- In the wake of the confrontation between HG Vora and Penn Entertainment, investors will be presented with two options: either maintain the status quo with the board's current proposal or adopt HG Vora's 'Gold Card' option, which includes the nomination of William Clifford, a seasoned gaming industry veteran and HG Vora's third candidate, who could bring a much-needed contrarian voice to the board and provide valuable oversight for the company's strategic direction.
