How Much is Barstool Sports Worth?
Saturdays Are For The Buyouts
In 2003 a print publication founded by David Portnoy called Barstool Sports began offering gambling advertisements and fantasy sports projections. Over the years, it has evolved into a full blown media powerhouse beyond sports, known for everything from its pizza reviews to its podcast empire.
Barstool is now the sixth-most popular podcast publisher in the U.S. ahead of juggernauts such as ESPN and NBC News. With a reach that most media companies would die for, Barstool sees more than 66 million monthly unique users with 46% of them in the coveted 18-34 age demographic. Barstool counts nearly 2 million followers on Twitter and more than 7 million followers on Instagram among its “Stoolies.”
In 2016 Barstool hired Erika Nardini, who was previously the Chief Marketing Officer of AOL, as its CEO. Before being hired, she was “hugely passionate about the site for a long time.” Prior to AOL, she had senior positions at Microsoft, Yahoo!, Fidelity and Demand Media, where she oversaw media management for corporations such as Volkswagen, Goodyear and Royal Caribbean.
Dave Portnoy and Erika Nardini
Nardini believes Barstool can be a $100 million revenue company in 2020. Speaking about Barstool’s reach, Nardini said “Brands are finding that if they want to reach an 18-34 year-old and move product, we are an exceptionally good bet.” With only 55% of the company’s revenue coming from ads, they’ve found ways to monetize just about everything. They offer “Rough N Rowdy” pay-per-view fights, various subscriptions and enough merchandise to match any major sports team.
Portnoy discusses the Chernin investment
In 2016, Portnoy sold 51% of Barstool to The Chernin Group “for about $10 million.” A couple years later in 2018, Chernin invested another $15 million in Barstool, reportedly valuing the company at $100 million. The Chernin Group’s CEO Peter Chernin, who is on the board of American Express and was previously on the boards of Twitter, Pandora, DirecTV and E-Trade, liked what he saw. Other notable companies he has invested in include Cameo, The PLL, The Athletic and most recently, Food52.
Peter Chernin (CBS News/Getty Images)
So where does Barstool go from here? Like any valuable media property, Portnoy and Chernin will likely want to cash out, given the right price. But who would be interested in acquiring them and how much would it cost?
Last week, we got a taste of who the most likely acquirer would be, when news broke saying Barstool was in “advanced stages” to sell the company to a gambling operator. If it’s a gambling operator, there’s two likely companies that would be interested in Barstool. Paddy Power Betfair, which acquired FanDuel for $465 million, is one likely suitor. The other likely suitor could be DraftKings, which tried to merge with FanDuel but was blocked by the FTC because the combined company would’ve held 90% market share.
So why would a gambling operator want to buy Barstool so badly? Barstool’s recently launched Barstool Bets would naturally be a good fit for a gambling operator. They could also leverage Barstool’s vast reach to gain more gamblers. With the Supreme Court ruling last year that sports betting can be regulated at the state level, sports betting is likely to see exponential growth over the next few years.
That leaves one question. What would it cost to acquire Barstool? Bleacher Report sold for between $175 million and $200 million on $40 million in revenues. Cheddar sold for $200 million while it was on pace for $50 million in revenues. Refinery29, which is said to have $100 million in revenue, just got acquired for around $400 million. Having a hot media property does not automatically equate to a big payday though, as BuzzFeed and Vice found out.
Acquisitions in the Digital Media Space (via Sara Fischer/Axios)
With a media empire that has a diehard following, it’s worth keeping an eye on Barstool to see what route Portnoy and Chernin go with should they decide they’re ready to get paid.