Mar 15, 2022 - Economy

Barstool launches social good platform following Portnoy controversy

Barstool Sports founder Dave Potnoy. Photo: Chris WIlliams/Icon Sportswire via Getty Images

Barstool Sports, the sports blog turned viral social community, is launching a new philanthropy arm called "Barstool Difference," pegged to its existing "Barstool Fund," which raised $41 million during COVID-19 for small businesses.

Why it matters: The company, which is forecasting $230 million in revenue for 2022, sees a business opportunity in converting more of its audience into philanthropy partners and creating matching opportunities for brands.

  • It also could provide a reputational boost for Barstool, which has long been accused by the online press of bullying and misogyny.
  • Barstool CEO Erika Nardini told Axios on stage at South by Southwest: "Barstool is oddly the least sexist place I’ve worked."
  • "We're a company that eats other people’s lunch and does so fairly arrogantly and quite often, and so we have a very, very large target on our back as individuals and as a collective."

Details: The initiative will have four parts, one to help women-run businesses, one for veterans, one to support youth service and one for sobriety.

  • Nardini, who often refers to herself as "Token CEO" and hosts a podcast by the same moniker, will lead the "Work Like a Girl" initiative supporting women-owned businesses.
  • The company will use its "Zero Blog Thirty" military podcast to develop a giving platform around veterans. It will leverage its "Million Dollaz Worth of Game" show to highlight opportunities in youth service and to fund scholarships for rehab, supporting sobriety.
  • Tonya Dressel, formerly the director of Steve Ballmer's philanthropy and a longtime Microsoft executive, has been hired to run the new effort.

By the numbers: Dressel noted the effort will be a huge engagement driver for Barstool's audience, which has shown a high propensity to participate in Barstool's charitable giving efforts.

  • More than 230,000 people donated to the Barstool Fund during the pandemic.
  • Barstool has signed more than 140,000 college athletes to its athlete promotion arm since the passage of the NCAA's name, image and likeness (NIL) policy. Nardini says they will play a huge role in this effort.
  • Part of the "Barstool Difference" initiative will be leveraging Barstool's expertise in social media to help organizations they fundraise for develop closer ties to their communities, and in-turn, Barstool itself.

Between the lines: Barstool Sports founder Dave Portnoy has long been considered a controversial figure, but recent controversy around stories about him published by Insider alleging sexual misconduct has reignited the debate around Barstool's image and values. (Portnoy has since sued Insider for defamation.)

  • Nardini addressed the controversy, calling Insider's stories "shoddy journalism" for not correcting claims of inaccuracies presented by Portnoy.
  • Insider said in response to Portnoy, "We published our stories on Dave Portnoy because we consider them to be in the public interest and newsworthy."
  • Nardini said in a separate interview that she stopped caring about what the press thinks.
  • "I spent the first two years that I was at Barstool trying to legitimize this company in other people's eyes ... Then I realized these people are never going to accept me, they're never going to endorse this company."

The big picture: Barstool's business hasn't been affected by the controversy, Nardini said. The company expects to grow revenues by 15% this year and has shifted away from being reliant on advertising from brands by building up its commerce and licensing businesses.

  • Betting operator Penn National bought a 36% stake in Barstool for $163 million two years ago, valuing the company at roughly $450 million.
  • Nardini said the explosion of Penn's stock during the pandemic and shortly after the Barstool deal was a turning point of the company. "That's when Wall Street started to pay attention. That’s when everything started to change."

What to watch: On Monday, Nardini confirmed Barstool is exploring a foray into live sports rights, and noted it will focus on sports that have a highly-engaged betting community, like football, college basketball and baseball.

  • "We had a bunch of conversations with Major League Baseball. Obviously they would deny that but it did happen," she joked. "We saved ourselves $85 million."
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