Before last week, the future of Barstool Sports seemed a bit unclear. Being owned by Penn Entertainment was creating headaches as they navigated regulations and laws around gaming in various states with millions of dollars on the line. When Penn forced Barstool to fire host Ben Mintz over his use of the n-word in a song, it reportedly had an impact on Penn’s stock and led to a revolt from Barstool’s loyal fanbase and others. Founder Dave Portnoy even implied that he wasn’t sure if he’d remain with the company once his contract ended.
Things got a whole lot clearer last week when Penn announced it had sold Barstool back to Portnoy and was going to instead partner with ESPN on their sportsbook app.
Portnoy picked up where he left off, publicly chastising his employees and re-hiring Mintz, and it appears that the company will once more focus on its “special” brand of humor and entertainment instead of gambling.
Barstool CEO Erika Ayers Badan (nee Nardini) recently spoke with Vanity Fair about where the company now finds itself and where it goes from here.
“We underestimated how punitive the regulatory environment was and how stringent it was going to be,” Ayers Badan told Emily Jane Fox. “Really, at the core, what Barstool is about—entertainment, satire, comedy, opportunistically capturing and creating viral conversations on the internet—that is so antithetical to what a highly regulated industry wants, or what the stock market likes, that [Penn] just became a place where this just was not working.”
Ayers Badan noted that Penn did embrace Barstool and didn’t ask them for chances, but they quickly racked up a lot of examples of issues caused by the connection.
Dan “Big Cat” Katz’s “Can’t Lose Parlay” premise ran afoul of Massachusetts regulators who objected to the “can’t lose” language. Regulators also would not allow Barstool to do any shows on college campuses due to gambling concerns, which was a major conflict with their target audience. And then there were the multiple articles about allegations of sexual misconduct against Portnoy, which impacted Penn stock prices.
“All of this put Barstool in a tough spot,” Ayers Badan said. “It put Penn in a tough spot. It also put me in a tough spot because I’m trying to grow a robust and rowdy and meandering brand where I don’t know what we’re going to be talking about next week, next month, next year, but I do know that, to grow Barstool and to have Barstool be relevant, and vibrant, and meaningful, it has to be able to explore comedy, and entertainment, and lifestyle and things that, honestly, just are really difficult in a highly regulated, highly punitive environment.”
The separation between the two companies appears to be the logical move for both parties. Now, for better or worse, Barstool can get back to being Barstool without worrying about the next corporate shoe to drop.
