Barstool Sports’ foray into sports betting didn’t work, and their CEO says the outcome may have been a “predictable” one.
Barstool Sports CEO Erika Nardini joined the “Sporticast” podcast posted on Aug. 31 and discussed the decision of Dave Portnoy to buy back Barstool Sports from Penn Entertainment (PENN) -), who also decided to partner with ESPN to create ESPN Bet.
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Nardini says that the two companies had always questioned whether a partnership would even work.
“We gave it the college try for sure,” Nardini said. “ I do think it was in some ways very predictable. It was always a question. It was always a question for Penn. It was always a question for us.”
She also acknowledged the reputation of Barstool and how it made it difficult to deal in business, which is rhetoric that Portnoy also acknowledged when he announced that he was buying Barstool back from Penn.
“If I put myself in Penn’s shoes … when you look at the revenue we drive versus the headaches we create, it's a little bit outside,” Nardini said.
More Barstool and ESPN:
- ESPN dives deeper into sports betting through landmark partnership
- ESPN reportedly wanted so much more than it actually got in the ESPN Bet deal with Penn
- Barstool’s Portnoy Unloads on PGA Prez
But the decision to acquire Barstool back from a publicly traded company also comes with difficult decisions for Portnoy and Nardini. A report by The New York Post on Aug. 30 said the company is expected to lay off nearly a quarter of its staff, or about 100 people.
Nardini didn’t directly acknowledge the report in the Sportico podcast -- it’s also unclear whether the podcast was recorded before or after the report, though it was posted after -- but she did already allude to the likelihood of layoffs due to the Barstool’s return to independence.
“We had the backing of a public company for three and a half years,” Nardini said. “It will mean changes here for sure. We need to get skinny.”
Nardini said that Barstool hired about 100 people every year for the last three years, and that at least of its decisions were under the guise of its Penn partnership. With that off the table, it will now shift its gears and cut costs accordingly.
“There's a lot of thinking done when Penn invested in us and then acquired us about what costs belong with Barstool versus what costs belonged inside of Penn,” Nardini said. “We don’t need to carry those costs going forward.”
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