How Barstool Makes Money?

8 minute read · Issue Number 51 · January 15th, 2021

Jan 15, 2021

Welcome to another weekly edition of Sports-Tech Biz! Every Friday, we learn about intriguing topics related to sports, business, and technology. If you’re reading this online or in a forwarded email, sign up for the newsletter:

Hi, welcome to the Sports Business Models Miniseries (SBMM)!

And no, it’s not about human models, although, here’s a picture of a beautiful Israeli model:

coralsimanovich

A post shared by Coral Simanovich Roberto (@coralsimanovich)

The SBMM is a limited collection of articles from the Sports-Tech Biz Magazine, where we’ll analyze four different business models in the sports industry.

The first three will cover the business models from three brands in the sports industry that I find fascinating: Barstool Sports, Whoop, and Mark Cuban. The fourth will be decided by you: the reader.

What sports brand do you find fascinating? What sports business model would you like me to cover? Let me know by answering this form (where you’ll find another Israeli model photo 😉).

Before we start, you may be thinking, “Ronen, this is crazy, I don’t even know what a business model is, and now you’re writing a miniseries! That’s it! I’m done! I’m moving to Wisconsin!”

My dear reader, relax, no need to move to Wisconsin (yet) — as always, I got your back.

Simply put, a business model explains how a business, a person, or an entity makes money.

The first out of four (1/4) articles of the miniseries will answer how Barstool Sports makes money.

Let’s jump right in!

Barstool Sports

Based in New York City, Barstool Sports is a digital media brand that produces and shares original content online.

It started as a newspaper back in 2003, when the founder Dave Portnoy wanted to work in the sports gambling industry, but they rejected him, so he decided to create Barstool.

The combination of humor, sports, and authenticity in their content makes Barstool one of the most popular media brands globally.

What does Barstool do?

The Barstool brand covers a broad set of different projects, activities, and products. All of them have the same objective in mind: capture attention.

The formula? Authentic content, consistently.

Great content generates engagement, which results in higher distribution and millions of viewers who eventually become followers.

One great thing about Barstool is that they mostly live on the internet and social media.

Most of the types of content they produce are written articles, videos, and podcast episodes.

Notwithstanding, they also run a mobile app, a SiriusXM radio channel, a digital merch store, a digital sportsbook for betting and gambling, and a fundraising platform that provides financial support to small business owners across the US.

Besides all that, Barstool engages in multiple kinds of partnerships, and they also covered a few sporting events in the past.

How do they make money?

Due to the several activities and projects they engage in, Barstool Sports has multiple business models and revenue sources.

One of their most critical business models is direct-to-consumer advertising (DTC).

Barstool has a particular audience — mostly teens and young adults in the US— and when big companies (say Pepsi, Coca-Cola) want to reach those audiences, they do it through diverse partnerships with Barstool.

Another critical source of revenue is merchandise sales, which, according to Forbes, have grown 400 percent year-over-year.

Other revenue sources include premium website subscriptions (exclusive content), partnerships, sports betting, programmatic advertising, and live events.

The Takeaway

Barstool Sports is a media and lifestyle brand company that uses sports and comedy to generate original content — gathering a passionate and loyal fan base during the last decade.

Barstool has leveraged its brand and loyal fan base to innovate and create additional revenue sources.

With over 30 million followers on social media, Barstool is a sports brand with the highest audiences, reach, and engagement rates globally.

While they continue to dominate social media with their content, I think their ability to create quality content consistently and convert attention into dollars in different ways speaks a lot about the company's quality.

This was the first out of four (1/4) articles of the Sports Business Model Miniseries (SBMM)! The next two weeks will feature the business model of Whoop and Mark Cuban’s. Let me know what sports brand would you like me to write about on the fourth piece of the miniseries by filling out this form.

QUICKIES

🎙 Lessons From Sports Sales & Marketing; This week’s Halftime Snack features Venugopal Rajagopalan — a sports technology enthusiast with over 14 years of experience in the industry. In our conversation, we talked about Venu’s story, his experiences from working with sports tech, what marketing practices teams and brands should do more of, trends in sports-tech, and so much more. Listen on Apple | Spotify | Google.

📈 Measuring excitement through analytics; After a game-winning interception, the analytics team measured the players' speed running to the logo. The fastest (most excited) player ran at 17.9 mph!

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