Founded in 2003 by Dave Portnoy, Barstool Sports’ journey has been a roller coaster to put it mildly. What began as a modest print publication in Boston, focusing on sports and betting, developed into a digital platform, gaining a massive following for its unfiltered approach to sports and pop culture, primarily targeting a young male audience.
Barstool’s business model is multifaceted but advertising plays a significant role, with the company earning revenue from display, podcast, and video ads. Their podcasts “Pardon My Take” and “Call Her Daddy” have been particularly lucrative.
“Call Her Daddy” was a significant revenue generator before moving to Spotify in a $60 million deal. Additionally, Barstool has ventured into sports betting, pay-per-view events, subscriptions, and e-commerce, selling branded merchandise to its dedicated fanbase, known as “Stoolies.” In early days, they relied heavily on selling merch.
Penn National Gaming Takeover
In 2020, Penn National Gaming acquired a 36% stake in Barstool for $163 million, valuing the company at $450 million. This partnership was part of a broader trend of media and gambling collaborations, anticipating a surge in online betting. Penn National gained full control of Barstool in February 2023 for $388 million, totaling $551 million for the entire acquisition.
The Surprising Buyback
However, in a surprising turn of events, Portnoy repurchased Barstool from Penn for a nominal $1 in 2023. This buyback followed Penn’s $2 billion deal with ESPN to rebrand Barstool Sportsbook as ESPN Bet. Portnoy’s reputation and Barstool’s controversial content were cited as challenges in the regulated gambling industry. With a net worth of $100 million, Portnoy now fully owns Barstool again.
Tasked with running a media company that lost $16 million in the first six months of 2023, Barstool had to make tough decisions. According to Fast Company, nearly 25% of staff were laid off in a bid to get back to breakeven. Previously, Barstool acted as Penn’s marketing department so losing money wasn’t an issue. Over time, the headcount became bloated and the business couldn’t afford to carry extra deadweight.
Controversies and Challenges
Despite its success, Barstool has faced controversies, particularly regarding Portnoy’s comments and alleged behavior. These issues have sometimes hindered its business operations, such as affecting licensing in the gambling space.
Looking ahead, Barstool’s future seems to pivot back to its roots, with Portnoy at the helm. The company’s ability to jump on hot trends, coupled with its strong brand identity, suggests a continued influence in digital media. However, navigating the balance between its edgy content and business growth in a changing regulatory environment remains a key challenge.