How Dave Portnoy Single Handedly Changed the Media Business Forever
Growing up, my father read three newspapers a day:
NY Times for national news
Wall Street Journal for business news
Newsday for local news
When I'd ask him why he read them? He'd say, “What else is there to read?”
He was right. Newspapers were the only game in town because they owned physical distribution. It was impossible for someone to write and distribute their content at scale. You'd have to invest millions to buy trucks, printing presses and other infrastructure.
Then the internet happened. The model changed. People didn't need to subscribe to a physical newspaper. New media businesses started popping up. They would rely on advertising to make money. The more eyeballs, the more money. The problem was that most companies couldn't get a large enough audience to make money.
How would a media company make money? Enter Barstool Sports.
Barstool Sports started in 2003 by Dave Portnoy. The idea was to create a media publication that catered to people interested in gambling. Barstool found an audience, albeit, niche. It's initial success boiled down to one reason: Dave Portnoy. People loved Dave and Barstool's fans became known as "Stoolies".
Dave realized that content was a commodity. Anyone could create content, but you can’t create a personality. That is how Barstool's content model was born. The company's model relies on four tenets:
Find amazing talent
Give them a platform
Provide them with the infrastructure to succeed
Align incentives so they don't leave
As of May 2020, Barstool has 41 active podcasts. Two podcasts, Pardon My Take and Call Her Daddy, are in the top 20 podcasts of US audiences.
Their success isn't an accident. Dave has a fantastic eye for not only finding talent but cultivating it.
As Erika Nardini, CEO of Barstool Sports, stated in a 2019 interview with Variety, "We're able to take people who started as bloggers and wrote very funny commentary on sports and life and moved those to an audio form. It allows for authenticity, with a very low barrier to entry."
Why is Barstool appealing to influencers? Take Alyssa Schoener. Alyssa has 124,000 followers on Twitter and 28,000 followers on Instagram. She could start her own podcast or vlog, but instead, she joined Barstool as an intern. You read that right. An intern! Not a contractor, not a full-time employee, but an intern. It sounds nuts, but it isn't.
Barstool has an excellent platform for her to leverage:
8.4 million US unique monthly audience for their podcasts (May, 2020)
55 million global downloads and stream (May, 2020)
8.3 million Instagram followers
2.3 million Twitter followers
To understand the power of their platform, look at the Call Her Daddy podcast. Barstool Sports launched Call Her Daddy in October 2018. The show is a raunchy take on dating and relationships in New York. In two months, the show went from 12,000 downloads to 2 million downloads.
Alyssa and other influencers find that attractive. They can achieve scale at a much quicker pace with Barstool than without them.
Barstool's influence translates to money for the influencers.
The hosts of the show, Sofia Franklyn and Alexandra Cooper, receive a base salary of $75,000. The contract included bonus payments based on downloads. In April 2020, the two hosts of Call Her Daddy were making over $400,000. Mind you; this is less than two years into launching. It's unlikely that they would have made anything close to that without Barstool.
There are trade-offs to partnering with Barstool. For example, Barstool owns the IP to Call Her Daddy. Sofia Franklyn left Call Her Daddy and is not allowed to monetize off the brand anymore. This trade-off is sensible because Barstool doesn't want to build a brand and then lose it once it becomes successful.
So why doesn't someone leave Barstool once they become successful? Well, not everyone wants to learn the business side.
Dave Portnoy is the preeminent example. Dave Portnoy sold 51% of Barstool in 2016 to The Chernin Group. Dave had built a successful content empire but didn't know how to handle the business end of the company. For example, Barstool didn't have a formal accounting system until The Chernin Group bought them. Dave became head of content and The Chernin Group installed a new CEO for Barstool.
Many creators only want to create content. Who wants to deal with lawyers, accountants and sponsors?
The content model succeeds because people don't follow publishers but influencers. Listeners of Call Her Daddy don't care that Barstool Sports publishes the podcast. The fans care about Alexandra Cooper (the sole host of Call Her Daddy now that Sofia has left). They are a family. The family even has a nickname, "Daddy Gang".
This model isn't only creating a loyal audience but making money. Barstool Sports' annual revenue in 2019 was between $90M - $100M (Barstool Sports was purchased by Penn Gaming for $450MM in 2020). A majority of the revenue came from podcasts, merchandising, and gambling. Yes, some of their revenue is ad-supported, but it's a unique model. Advertisers are paying for a loyal demographic that they can only get from Barstool. Take Call Her Daddy. it's hard to find a piece of content that reaches the 18-30 female demographic better than Call Her Daddy.
Physical newspapers are dead, and ad-supported media businesses are on the way out. I see Barstool Sports as setting the trend for the next wave of successful media companies. Build a personality-driven site and diversify revenue streams beyond advertising. The future of media isn't content, but the people who create that content.