Barstool Sports is undergoing dramatic change this summer. Its eponymous sportsbook is gone, and so, too, is its corporate ownership. Now the digital media company, perhaps best known for its sometimes controversial content, is back under the private ownership of founder Dave Portnoy.
CEO Erika Ayers Badan joined the Sporticast this week to discuss the changes, and what this “new era” means for the company.
“Whether you love Barstool or hate Barstool, there’s something either weird or entertaining about this story,” she said. “Only at Barstool would we sell to Penn National and then three months later buy the company back. It’s bananas.”
Here are five other moments that jumped out from the 30-minute conversation.
● Barstool clashed culturally with Penn Entertainment, a legacy company whose background is in casinos, gaming and horse racing. Barstool made its name pushing boundaries, and gaming companies are notoriously rigid due to strict state-by-state regulation. Ayers Badan described Barstool’s “contortions” trying to fit in with Penn.
“For us, it was everything from, ‘We had a video go viral. Is that too controversial? Would that upset stakeholders, whether those stakeholders were inside of Penn, on the regulatory side, or on the shareholder side?’ Penn has a lot of considerations, they’re a very big business, but after a while, it kind of changes who you are and what you do when you’re so worried about who you’re going to offend.”
● When asked whether some of that tension should have been predictable, Ayers Badan called the ESPN-Penn tie-up a “much better marriage.”
“We gave it the college try, for sure,” she said. “I do think it was in some ways very predictable. It was always a question for Penn; it was always a question for us. In that regard, I think the ESPN partnership is a great one. [They are] two publicly traded, massive, massive companies. Institutionalized in sports and casino. In that case, it’s a much better marriage.”
● She also praised Penn for its ambitions with Barstool. Penn initially paid $163 million for 36% of the company, then bought the other 64% for $388 million earlier this year. Portnoy bought it back for $1.
“I give Penn a lot of credit for putting the investment in Barstool, for having the foresight to think about needing a big brand for their sportsbook,” she said. “I also give Penn a ton of credit for trying to take a pirate ship and make it work in an environment that’s really dictated and predicated on state regulators and state regulation.”
● Barstool Sports is losing about $1 million a month, Portnoy said this week on the company’s Spittin Chiclets podcast. Asked how Barstool plans to eliminate those losses, Ayers Badan talked about a “leaner” company that is “a little more judicious” about the projects it pursues.
“Profitable growth is something that this company knows how to do,” she said. “We didn’t need to think about it the last couple years, because we were thinking about growing a sportsbook, we were thinking about integrating into a bigger company. So the changes that I think you’ll see are going to be hard for us because it’s getting leaner, it’s getting more focused, it’s getting more disciplined. One of the things we did to grow so much over the last eight years is to incubate a ton of things and see what worked. And now we need to be a little more judicious about what we are greenlighting and what we are not.”
(This interview was conducted on Tuesday. On Wednesday, Portnoy said layoffs were already underway, according to Deadline. The New York Post reported Thursday that around 100 people will be laid off, about 25% of the staff.)
● Social media has been a critical part of Barstool’s financial success and rapid growth in the last few years. Asked about the current uncertainty surrounding social media—possible regulation on TikTok, for example, or Elon Musk’s volatile leadership of Twitter/X—Ayers Badan said it wasn’t a huge concern.
“The bigger gating factor for us is that there’s an ever-changing sense of what the community guidelines are,” she said. “Like, what’s permissible today on Facebook or what’s permissible today on Snapchat versus what was permissible yesterday. We spend a lot more time looking at that, to be honest.”
Listen to the entire conversation through Apple, Google, Spotify, YouTube or wherever else you get your podcasts.
