Barstool Sports’s New Owner Reportedly Laying Off 100 Staffers After Purchasing Company For One Dollar
11:50 AM EDT on August 31, 2023
Barstool Sports is currently in the process of laying off something like a quarter of its workforce, less than three weeks after the company was sold by casino operator Penn Entertainment to Dave Portnoy for the low, low price of one dollar. Portnoy announced the layoffs Wednesday on Barstool's YouTube channel, explaining in an angry tirade that the company is far from profitability and would need to work toward "breakeven" by demanding more and better labor from its remaining workforce, who Portnoy says will have to "step the fuck up." Barstool's staff had ballooned to approximately 430 workers during Penn's period of ownership, according to a report from the New York Post; this round of layoffs under Portnoy's aggressive belt-tightening will eliminate approximately 100 positions.
Portnoy, who founded Barstool Sports in Boston in 2003, seems disinclined to invest much more of his own cash into this expanded version of the company than the dollar he spent to buy it back from Penn Entertainment. Barstool Sports has made Portnoy a lot of money over the years. It was a growing and profitable enterprise when Portnoy sold 51 percent of the company to investor Peter Chernin in 2016, for a reported $10 million. Portnoy bragged at the time that the deal, which allowed him to keep creative control of Barstool's content, had made him "kind of rich now." Chernin Digital Group pumped an additional $15 million into expanding Barstool in 2018; two years later the company—now more of a lifestyle brand for men whose personalities and politics resolve as a conspicuous habit of saying aloud the word "tits"—was valued at $450 million when Penn paid $136 million in cash and stock for a 36-percent ownership stake. Penn dropped another $62 million the following year to up their stake to half of the company, and in February of this year Penn bought up the remainder for a cool $388 million. Portnoy estimated his own net worth at something like $100 million in 2020, after Penn's initial investment. After soaking up his share of more than half a billion insanely misspent dollars from Penn's doomed branding project, Portnoy can afford media properties worth a lot more than a single buck.
But as we have seen from other media investors—and really from investor owners across every industry—one does not buy a company in order to grace it with new resources, but rather to extract wealth from it. For all of Portnoy's talk of Barstool as a newly unshackled pirate ship, this downsizing bloodbath, right down to the Do More With Less edict, is drearily normal by-the-book corporate media stewardship in the 21st century. And, for what it's worth, it does appear that Barstool's operations had expanded out of all proportion to its value as a brand or viability as a media product. In its Aug. 9 SEC filing, Penn revealed that Barstool had lost $16.1 million through the first six months of 2023.
Penn would certainly not have taken a breathtaking nine-digit bath in order to be rid of Barstool if its standalone operations were anything even close to successful by anything you or I would consider a sane set of business metrics. For most of the past decade Barstool has been held up as an example of a bold and successful company persevering and thriving against all odds and trends in a media landscape otherwise defined by doom and gloom. This turns out to have been, ah, overstated: Now that it can no longer depend for cash upon the desperation of a brand-hungry gambling company digging into previously unexplored depths of the sunk cost fallacy, it turns out Barstool might just be a shitty aggregator and T-shirt merchant facing the usual algorithmic horrors of ad-supported digital media in these end times.
The threat facing Barstool, according to its new owner, is existential: "[The layoffs are] a no-brainer," he explained during his Wednesday rant. "It's not like I have that moral, well—you can't do it, because nobody will have jobs. We'll all not have jobs." Of course, not everyone at Barstool Sports exactly needs the job. Portnoy has a few hundred million bucks to his name and essentially a free media company he can now strip to the bone. The laid-off staffers have whatever nominal skills they gained churning out replacement-grade chum for the overfunded media arm of a casino operator, and whatever fleeting hope they have of jumping back into a digital media industry where the only jobs they're qualified to hold are being turned over to artificial intelligence.
One laid-off NFL blogger that Portnoy spent the rest of his Wednesday YouTube rant emphatically characterizing as a worthless replaceable drone later joined the program in order to make clear that he holds no ill will for anyone at Barstool, one of several now-former Barstool employees who leapt onto social media to make clear that they would still be proud to have Dave Portnoy hock a loogie into their breakfast cereal. This impulse to grovel at the feet of unaccountable ownership, long a defining trait of the Barstool Blogger Type and now more important than ever for those left standing, will serve these people well as they look to reenter the field of digital media.