Barstool Sports CEO Erika Nardini Learns From Digital Media's Past Mistakes

Here to discuss all things bar Stool is. It's CEO Eric and Ardini. Erica, thanks for coming in, Thanks for having me. I'm hoping you're going to tell me the secret formula. It's not. It's a little more complicated. Lemonade and is slightly more complicated, and it's the rest of your business is very complicated as well. Well, we'll get

to the beverages in time. But what I want to do first is, I know there aren't many audiences for media brands out there that are devoted as the so called stew Leys as they're known, But I want to explain Barstool first to the uninitiated. I know there's a lot of brands out in the sports world, from ESPN to bleacher Report. So how would you say bar stools voice differentiates from those typical players in the space. Yeah. I think Barstool Sports is infinitely an Internet company. We

were born of the Internet. Dave Portnoy founded Barstool in two thousand four. He developed a very distinct point of view and voice which really resonated with what he would have called at the time the common man. So what really sets barstool apart tonally is that we are on the same level as our fans. Were not purporting to be journalists, were not purporting to be authorities. What we really want to do is to make people laugh. It's a company that does not have an agenda be on that.

We do satire, we have humor, We cover entertainment, we certainly cover sports. But what makes Barstool very different is really the Internet of it all. That we are focused and born out of the Internet. There are plenty of digital native content companies that are suffering right now and being digital native didn't really help them. Yeah, what what did you guys figure out that others didn't? I think the what the challenge with Internet brands right now is

that they forgot about the consumer. There they point of view and voice became commoditized. And when you have a commoditized point of view or the content is on original and you don't have a deep relationship with your audience, and those two things go together, it is hard to create a brand that can break through and resonate. And you know, I've seen it. I worked and I've worked

in the internet for twenty years. So if you look at you know, why does someone go to Yahoo versus they go to a O Well versus you go to Huffington Post, versus go to Vox. When you're publishing, you know, a slightly different version of the same news story, you become completely undifferentiated. It's commoditized, right, So I think there were two. There are two main challenges in the media business, whether it's an Internet business or traditional business. One is

the attrition in the digital space of advertising. Right the advent of the social platforms, they sucked a lot of the air out of the room in terms of traffic and engagement and time spent. They took a lot of the value. You know, if you were to ask someone at a major magazine publisher, you know, things that used to be valued at for a dollar are now valued at since and then the third piece of it is that their businesses didn't diversify because the brands didn't grow.

If you can't find someone who wants to wear your T shirt, your brand is going to struggle to have a different business model than an ad driven business model. And that's really been very key to our success, which is we have a very diverse business because we have brands that people want to identify with, that they do identify with what they want to badge themselves with, and

are relatable and ongoing and differentiated and not commoditized. But for all that relatability, as I was saying earlier, you guys have had some controversy. There's been a lot of criticism about everything from uh, sexism or harassment that has either been part of the content or the conduct of those following along on on social media. You know, is this a problem for your company or is it really actually just kind of part of the DNA of the

brand at this point. Yeah, it's a it's a good question of whether it's a feature or above each right, um, controversy isn't the intention of barstool sports. I think when you think about the controversy or people look to examples of the controversy, those are mostly things that have happened in the past and are said by people who aren't active listeners or participants or readers or viewers of Barstool Sports. Um, so I would say the perception of controversy can be

grossly exaggerated. That said, I don't think it hurts The controversy doesn't hurt us because it helps identify our base and it also, you know, there's often a lot of hypocrisy in that controversy and in the criticism of Barstool, So that a great example. We are a sexist, misogynistic company. We're the only company in media with nearly an entire

female c suite, So there's one. Two. We have more women on the radio, more women starring in content than you would find any sports media company proportionately to our size. So it's things like that where actually this is a very fascinating company. We are unafraid, we are unfiltered, which often puts us in the headlines for a variety of reasons. But it's that level of authenticity again, you know, to use that word that that makes us breakthrough and res Nate,

We're not playing it's safe. We're not covering hockey or football, or entertainment or relationships or the headlines coming out of the Internet the way everybody else is, and we don't want to. But isn't that a double edged sword? Because on the one hand, frankly, controversy has earned media. You get publicity from that, and I think it also plays well with your brand. On the other hand, are you guys a controversy or two away from an advertiser backlash?

That's always been the issue with all sorts of media operations I think of like from Perez Hilton to w w E. The bad boy image works to an extent and then it doesn't. Yeah, I mean I think it's working like we're not. We're not a controversy away from an advertiser backlash. Our brand. Advertiser business has grown, I think in the last two years, so the world is changing. How people perceive what what people perceive as valuable, what they perceive as real, what they perceive as resonating has

changed dramatically. We live in a world where attention is the most scarce and finite research resource, or or it's just it's precious and your and our ability to capture headlines and interest and to maintain engagement from our audience is what ultimately is going to make us an incredibly powerful vehicle for brands and an incredibly powerful vehicle for ourselves.

And the brands are there, there's no question. And podcast seem to be a big part of that right now, several dozen podcasts in play that are giving you about a third of the company's revenue. That's right. Yeah, so we love podcasting in a barstol Sports started as a newspaper, uh. It then evolved into a blog. From the blog, we moved into podcasting and really live video. And when you think about podcasts, right, podcasting is really a natural extension

of blogging. It's one person or a few people's point of you. It's a conversation. It's first person thought. It's on it's not linear. It can be long, it can be sure, it can look and sound like anything. We like that as a medium. I get how having the kind of voices you have works well for podcasting. I'm

curious about how you approach it as a business. You on Twitter recently went on a large rant, interesting rant where you kind of acknowledged the growth opportunity that podcasts represent right now, but also sort of the perils of over programmatic. Yeah, I look like I've been in the Internet since you were at a O L that I

was at it. I started my career fidelity investments, buying the Internet advertising, and then you know, I went to Microsoft, I worked at Yahoo, I worked at A well as part of the demand media I p O like I have seen. I've seen the big people, big players in the business overlap twenty years, and we screwed up a lot of things about digital media. It was a medium I mean, I don't know if you remember, but where there was whizz bang pop ups, you know, unreadable content right,

unreadable content. You felt like you were going to get a virus from going to a website. So you know, we over monetized, right, We over monetized. We became too smart and cute with programmatic and with s c O and s c M. And the glory of podcasting is that it's actually a very intimate medium. There is a there is a true you're in somebody's ears, and there

is a very intimate relationship. And you know this from having a podcast between what you have to say the people you interview, the conversations you're having and your audience. When you put an AD that's prerecorded, it's dynamically inserted, it's targeted to me as a consumer. When you slap that in the middle of it zero context, the probability that that ad is going to get skipped is extremely high. And that's exactly what happened with banner ads, right they

became wallpaper. Who looks at a banner ad anymore? Um So, how do we, at this stage of the game prevent podcast from falling down? That? I think the biggest thing is that, you know, we've made a statement we are sticking to host read, so we are going to integrate brands into our content and into our conversations. Right, you started this conversation by mentioning Pink Whitneys, which is, you know, our flavored vodka that we have with New Amsterdam Vodka

that came out of an ad read. And it came out of an ad read because it was a story by one of our hosts about how he drinks his vodka. And when you make an ad part of a content experience and a brand part of a content experience, you know, it's like it's almost evolving the very definition of advertising to make it content that's what will perform. And so, you know, I think the risk of podcasting is a couple of things. One is from a content creator perspective

and a content create a content perspective. You're going to see publishers treat this like video, whereby people will say, hey, we have a slate of new, built of sold podcasts that are about to launch. It's not going to work because podcasting is really still at this stage of performance medium. So anyone can have a brilliant idea for a podcast. There's seven thousand podcasts right now in the world, so there's a huge long tail. There's a huge glut of

content in podcasting. No one really cares if you have a bunch of built of sold concepts, and there's no assurance that it's going to work for an advertiser. So so I see that as something that is going to

fail and not work in podcasting. The second piece is that in order to harness a long tail, just like the Internet, the ad tech folks and the kind of performance driven scale marketing people of the Internet will try to create uniformity and they'll try to insert you know, pre produced highly scaled, scalable, dynamic ads that don't require humans. And I understand that I've been in those businesses. I've helped build those businesses. I think that's counter to the

type of medium that podcasting is right now. But isn't it possible though, that if you don't play that game, you're not able to scale your business because you're doing all this customized stuff. No, because I don't think it's actually that custom and you'll maintain premium. See what will happen is as the ad performance decreases, as the ad skip rate increases, it's going to actually put price pressure downward, price pressure pressure on the advertising, not upward price pressure.

Right when you look, if you asked anyone in the music industry, or really any performance advertiser what the single most important thing is, they'll tell you it's radio play because the host listener relationship is so important. And when you have a compelling host endorse a compelling product, the r O I on that will beat any Internet product and the time, and I think the same is true in podcasting. So I get why you're bullish there. Here's what I don't get. Um we go back a few years,

you guys had sort of a notorious flirtation with ESPN. Yes, we had a one night stand. One night stand literally in terms of a one episode show. Um, but why aren't okay? That was two years ago. If your brand is as hot as it is now, where's the big video play? Where is the the O T T brand? Where is producing for other brands that don't necessarily give you a show, but hey, you create a documentary from them?

What's the story there? We have our own O T platforms and that is so Apple TV, Roku, Amazon YouTube. We are on Snapchat. We have two of the top five shows on Snapchat, where the number one streaming channel on Serious x M. We are the fastest growing sports brand on TikTok. So we are building our our own real estate on all different types of platforms audio platforms, social platforms, video platforms. What I believe is it's that organic real estate that we can build ourselves, which is

the best place for our content. We have done an incredible documentary on the history of Barstool Sports, really centered around tap Portnoy, the founder. We put that into our subscription product called Gold. So you know what I learned from the ESPN experience and really linear television experiences. You know, one, it's very appealing to get the validation to be on someone else's network. That was exhilarating for us when we did the rundown on Comedy Central, which was in at

the Super Bowl in that was an incredible experience. We had trucks and big production and it was with bright lights, and we learned the television format. But what you saw was that an entire company dedicated all of its time to one twenty eight minute production versus spending all of its time building a hundred productions and running those productions on its own channels. And so, you know, we will do documentaries. We have a documentary, we have O T

T platforms. We are very deeply invested in video. That's been our single biggest pivot, i would say, in the last twenty four months. But you're not going to see us give those to other people to build audiences on their network. You're going to see them where you're going to see us put it on our own platforms, build audiences, monetize those directly, which is kind of a departure from

what a lot of companies are doing at their work. Yeah, it's like everybody becomes when you can't bring people to your own network and you need a more lucrative way to make content, you sell content to someone else. Right, So look at you know, Go ninety, you know, remember the Go ninety deals or GO ninety doled out you know, very very very lucrative checks to publishers, and then those publishers spent all of their time making content for Go nine d that, as it turns out, nobody saw. And

the question is doesn't really matter. Did the check from Go ninety is that more important to the business or is it the eyeballs on the content that was created? And at Barstool Sports, it's the eyes on the content that was created, not the check. So that's why I'm building a business that's very diverse from a monetization perspective and not does not have dependency on a single form of revenue, so that I can keep our eyes on what's most important, which is our content and our fans.

And of course, as you mentioned, you are active across a lot of different platforms. But when I was interested to read recently was one of these platforms, and now is Telegram, which to my you know, a little background, And if I'm getting this wrong, explain it differently. But the content issues you were running into on platforms like Instagram,

or perhaps there was some sort of violence in particular footage. Um, now if you're able to go on Telegram where there's no kind of regulation of the content, But is there monetization? They're like, what is? What is? Yeah? I believe that we want to be in every place where our audiences and if you look at the broadest sense, we have people from twelve years of age who are following us

on Instagram, They're watching our pizza reviews religiously. They follow us on Twitter or on TikTok up to you know, sixty year old guys reading the blog who are from Boston and lived you know, lived in Boston when Da've created the paper. We're really platform agnostic. We ultimately want to connect with our fans in a medium that lets us express ourselves in a way that we can be as funny as possible, or we can bring our satire to life and our humor and our point of view

to bear. But can you monetize there? But I'm not worried about the monetization. So I'll give you an example on Instagram, since you brings that up. Instagram and Facebook are continually defining and tweaking their quote unquote community guidelines, which is their prerogative, and I have total and utmost respect for that. It's been long said that it's very difficult to understand what those guidelines are, how and when they change, because they change often, and to mitigate and

manage that as a publisher. So what what's Facebook prioritizing in its feed? That's been a topic for ten years, right, what's Instagram value in its feed? What's happening is Facebook and Instagram or are becoming closer together. Two is that they are also continually evolving and I think tightening those community guidelines. We had a video of a girl riding a bike and the bike hit a stairs and the girl tumbled off the bike, and Instagram ultimately didn't like

that video because the girl could have gotten hurt. She didn't get hurt, she was fine, she lived, she wasn't substantially harm, but they don't like that there's a risk that she could have gotten hurt. A video like that will get millions and millions and millions of views because that video is you know, it's like America's home videos, right, it's the allure of God. What happened in this video

is what makes it ultimately compelling. We want to respect what's happening on Instagram, so we won't put that video on Instagram. But ultimately, if you look at our eighteen to twenty four year old audience, they love videos like that. So those are the type of videos that we will put on Telegram because our audience is there. They're looking for content that's entertaining, and we want to deliver that

to them. Got it um. What was also interesting is you guys have been experimenting recently with NASCAR, a presence there that perhaps you weren't covering racing all. Yeah, we didn't know anything about racing, right, and now all of a sudden, let's be clear, it's a sponsored deal. They're pain No, well they are and they aren't. So we what started as a sponsorship from NASCAR and Dave Portnoy,

the founder of Barstool Sports. Dave Portnoy went down to Daytona, had never been to a NASCAR race, didn't follow NASCAR race, didn't follow NASCAR, probably had some of the misperceptions of NASCAR fans that are very common for people who don't watch NASCAR. We had I think ten personalities down there. We did a live show, We set up in the fan zone and had an awesome experience. The NASCAR people

could not have been more open, more welcoming. We got so much access and we're able to, you know, not only engage with the drivers, but the racing teams and the track and the you know, the pace car and everything. Uh. We had an incredible experience. We carried that through several races, and the last two races, which were Talladega and Las Vegas,

we sponsored a driver. So not out of our sponsorship with NASCAR, but from bar Stool Sports, we decided that we wanted to sponsor a racer, Matt Di benedetto car number five. We branded one is Barstool Sports with all of our podcasts, and then that was in Las Vegas, and then in Talladega we created a car around one Byte pizza we sold merch. Was a very deep, integrated

partnership with the driving team. NASCAR loves it. The Talladega race was the single largest streamed race in history, mostly because we streamed it live on nearly We talked about watched it streaming live and talked about it on every

single channel that we have. So it's a good example of sports that are looking to bring new audience and new eyeballs to that sport are coming to Barstool Sports to help them do that because we have such a plug into young audiences and our engagement with those audiences is off the charts. The second thing you're seeing happening with Barstool, which is different than you would find with a Turner or Fox or an ESPN, is that we

are a young, nimble company. So when we get behind something we didn't have on a strategy deck that we were going to sponsor a race, team literally came up, you know, came up. We decided in a week. In two weeks, we have the car wrapped, in two and a half weeks, we had the merch designed, and three

weeks later we were on the track. So we tend to get behind the things that we find passion around, whether it's football, whether it's hockey, whether it's golf, whether it's entertainment, or whether it's Nascar, uh and we get behind those things in a big way in a way that's creative and ultimately in a way that's a creative to the experience we're trying to create for our fans.

So in this case, being able to see you know, a bar stool car on Fox Racing in a NASCAR racer on NBC in the case of Talladega was incredible. So we're very three sixty to use a marketing word around that, But ultimately it's just very organic whereby when we get behind things and find them interesting and compelling, our fans tend to follow and we tend to go

all in. Is that a sign of things to come in terms of your relationships with various leagues that you definitely, Yeah, definitely, maybe look at we have an incredible partnership with the U s g A. So we've done You've had a similar experience in golf around US Open. Uh We two years ago Um Dave and a host our our golf podcast which is called four Play. They went and they had a Mulligan challenge, which was Dave's hypothesis was that he could win the win the US Open if he

had unlimited Mulligan's. It was very funny. We captured a tremendous amount of content. It sucked all the air out of Media Day because what everyone was watching was barstool Sports, and if we could be the you know, the Mulligan challenge would work or not so? Um, the us G has been incredibly open to us same spirit of partnership. Right want young audiences, want new audiences. They want to quote unquote grow the game. Anyone looking to grow the game tends to be open to Barstool Sports to help

them do that. If there's a recurrent theme though in this Converse station, it is that Dave Portnoy is quite a character. Maybe that's an understatement, and I'm just curious you're managing this incredible business. Is it also your job though to manage him? Does he? Is he someone who needs to be like reined in? Watching and I have an awesome partnership. So we've met in We hit it off immediately. Single best partner I've ever had professionally. I

think he's brilliant. I think his understanding of content and chemistry is just electric. Um. But he does he know where the line is? The line? No, I'm not the line. He understands the line. And we're very fortunate we've grown from twelve people to now people. We had maybe ten personalities when I started. We now have almost seventy and we have a great system for them knowing the line. So we want to find people who you know, have a point of view, are fine, me, are captivating, are

hard working, who understand the Internet. And we have a very strong creative culture whereby almost through osmosis, the way that Dave and Dan Katz and Kevin Clancy and Keith Markovic, like the early Barstool guys, are now replicating how they thought about content, what their work ethic was around creating content, and also where the line is around around that content. Those are all things that we manage within. You know, in a normal company you called a writer's room. In Barstool,

we just call it barstool. Okay, Well, here's the two part questions about the future of the brand. Number one, I'm wondering, you know again, I was talking earlier about W W E and Perez Hilton. It seems for some brands there's like the bad boy period and then eventually they clean up their act because that's what it takes the scale to the next level. Is that what you guys were about. And part two of this is it's called Barstool Sports. But you're right, you know, you're talking

about pizza and about everything but sports. Yeah, is there a future where sports actually isn't so central to what bar Stool is. So I'll answer the second part first, which is that you know, Dave couldn't get the U r L barstool dot Com and called it Barstool Sports. And I think we're so much bigger than sports. We certainly are sports, and we have guys and girls who love sports. We also have people who know nothing about sports and care about you know, entertainment, military news, you

name it, lifestyle, food. Um, so I would say we're far bigger. You know, a lot of people dropped the sports in our name, But I think really what the most important thing is when you see or touch any of our brands, which gets to the first part of your question. You know it when you feel it feels

like Barstool, feels uniquely Barstool. The second piece of what makes us very different from a pre as Hilton or WW or The Ringer or any other you know, any of these brands, is that we have worked incredibly hard over the last three years to grow almost sixty brands in our portfolio. So when you say Barstool Sports, Barstool Sports is a brand in and of itself. It's also Viacom right, we're sitting over a port. It's Disney right.

We're an i P company, whereby we are building hockey brands, golf brands, lifestyle brands, entertainment brands, vodka brands, merch brands. We have a tremendous amount of i P in this company. We grow each of those pieces of i P. We do it on different platforms, we do it in different mediums, we do it in different ways with different personalities. There's a tremendous amount of crossover in the network, in the network, um,

but Barstool is bigger than just one monolithic thing. We have the Barstool brand, we have every brand that we've created in the last three years. And then we have incredible personalities who are in and of themselves celebrities and brands. And that's what makes this company so different is that it's incredibly layered, it's incredibly nuanced, and from a content and brand perspective, it's quite diverse. It's not one thing, it's not one personality, it's not one point of view.

We have guys and women who disagree constantly. You know, we've got the Yankee fans versus the Red Sox fans. We've got one point of view versus another point of view. It's a reality show, you know. It's as though you had Disney or Marvel with a reality show built over it and built on the Internet. Well, when you make the Disney comparison the Viacom comparison, I wonder, are the ambitions to be that big? And is it possible that to get that big you need to be acquired by

the Disney's or Viacoms of the world. Is that the endgame? I don't know what you know? Even I always laugh about this, which is people say, you know, what's your five year plan, what's the seven year plan? And we always say, we don't know. Um. And that's not to say we're not strategic, nor to say that we're not thoughtful about where we want to go or what we want to do. But what I think we are at

our core is really passionate and opportunistic. So you know, yes, would we like guns money and steal from a big media company to be in and around our business. Definitely. The things we could do to drive linear the things we can do to grow personality, the things we can do to create brands. I think is unparalleled. Um. That said, you know, we're profitable company now, we're growing incredibly quickly. We are at the top of our game in the fields that we are in. I also see a path

where we grow independently pretty successfully. So you know, I think it's a long way of saying we don't know what the future holds. We're incredibly open to what that future. It's like, Well, that's the last question. Where else are you guys going to go that we need to pay attention to going into you need to pay attention to sports betting. So I think that we will be a force in sports betting, in the type of content we create, in the way we create it, in the level of

passion and originality, and in what we do. So sports betting is a place you should definitely look out for us too. I think you'll see us in more consumer products in the same way. We partnered with New Amsterdam Vodka to launch Pink Whitneys, which is you know now the third biggest flavored vodka in the world, and under two months, you'll see us do more of that. Um. And then I think you'll see us do more in podcasting, and there's more to do. There's more to do? Yes,

more to do? I mean, you know, isn't there though a saturation point with the podcast? There's a saturation point if your podcasters and your podcasts all appeal to the same audience. Right when you look at Barstool Sports, Caller Daddy, which is the number one mail podcast in the world, has a completely rabid, completely loyal, massive fan base. The women and men who listen to call her Daddy probably aren't listening to zero Blog thirty, which is our military podcast.

They may or may not be listening to Pardon My Take or Spitting Chicklets or KFC Radio. So as we grow new brands. Were very mindful to growing brands that can bring new audience and can extend into new spaces and who we feel that we can you know, pour gasoline on to make bigger. Got it? Well, it sounds like you've got a big agenda. We'll be watching and seeing how it all plank. You. Thanks for the time. I appreciate it. This has been another episode of Strictly Business.

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