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Barstool Sports, Bud Light and The Name Of The Game
The emerging cultural minefield for executives of right-leaning brands
Recently, a moderately known Barstool Sports personality, Ben Mintz (aka – Mintzy), live streamed himself reading the lyrics to a Bone Thugs-N-Harmony song when he, in pure Ron Burgundy fashion, uttered the n-word. Despite Barstool CEO Erika Ayers and founder Dave Portnoy arguing that this was an innocent mistake, their parent company, PENN Entertainment, could not abide by the misstep and fired Minzty. But before we get too far into the post-mortem and what this means for the future of the culture wars, let’s step back for a minute.
I’ve long wondered if all companies play by the same rules in the culture wars; does effectuating the World Economic Forum, ESG, DEI playbook affect all companies equally, or are there different rules for companies with different customer bases? Until recently, it was a known unknown. After all, leftwing politicos have long been fans of attempting to use boycotts against all sorts of organizations, from explicitly rightwing ones, like Fox News, to organizations that dare criticize healthcare reform like Whole Foods. However, that proclivity had never manifested itself on the right. So the question remained if that was a muscle the right wing could and would flex. Any lingering suspicions to that effect were put to bed over the past month with the incomprehensively successful boycott of Bud Light due to simply creating a can with Dylan Mulvaney’s face on it.
What the Mulvaney episode laid bare is that there are divergent sets of rules for companies with different customer demographics, one for companies that have a left-wing or center political demographic and those with a right-leaning one; after all, Mulvaney promotes over a dozen brands, from Nike to Maybelline, and Crest, and yet, only Bud Light suffered significant repercussions for their engagement. Organizations with a left-wing/center base can feel free to gorge themselves at the woke buffet. They can help themselves to a heaping scoop of BLM, pile their plates high with a gargantuan stack of pronouns, and top it all off with a nice, creamy patriarchy sauce. However, there is sad news for those companies with the right-leaning demographic. You, my friends, have to be cautious in what you choose to partake in, or maybe, don’t pick up a plate at all. It’s time to sinch up your belts because it’s diet time.
For the executives at these right-leaning demo companies, it may prove impossible to serve both the masters of the globalist culture warriors and their conservative customer base who is starting to revolt against those institutions and attitudes. Bud Light was an initial foray into these battlegrounds, but today I bring you another potential cautionary tale—that of PENN Entertainment and Barstool Sports.
Outside of the occasional Celtics championship, growing up as a Boston sports fan in the 80s and 90s was a depressing scene, but all that changed in 2001 when the Patriots pulled off one of the most unexpected upsets in sports history by beating “the greatest show on turf” St. Louis Rams in Super Bowl 36. That championship set off the most dominant run of any professional sports city in US history, where Boston teams racked up 12 titles in 17 years across all four major sports (deal with it, haters). Of course, this level of dominance set off a frenzy of interest among the fan base. The rise of America’s most voracious sports scene coincided with a guy running around Boston, sticking cheaply produced newspapers into those plastic bins to promote his gambling and fantasy football picks. That guy was Portnoy, and the paper was Barstool Sports.
As Barstool evolved beyond just gambling to sports more generally and to the broader culture, Portnoy brought an entertaining rawness to the discussion that rubbed some people (see – the political left) the wrong way but endeared him to his fans—because of this had a rabidly committed group of sub-40-year-old male diehard fans. And though they may not have been explicitly right-wing, they were certainly not interested in the PC culture view of the world.
After several city expansions and a continually growing group of devoted Stoolies, in 2016, Barstool sold a 51% stake to the media and cultural investment company The Chernin Group. At the sale announcement, Portnoy promised the Stoolies that the content would not change, and it didn’t…for a while. This was followed by gambling enterprise PENN Entertainment purchasing a 36% stake in Barstool in January 2020. Since those two acquisitions, some of the content has been toned down, most notably the sunsetting of two long-running series, one in which Barstool covered female teachers taking (ahem) advantage of their male students that culminated in the annual Sex Scandal Teacher Starting Line-up (that seems to have ended with the 2019 “team”), and the ever popular Guess That Ass which challenged readers to guess which celebrity Instagram ass post they were looking at (which appears to have ended in October 2020).
While Stoolies were upset that these favorites were left in the trash heap of smut history, there was an understanding that these had become too risqué for a brand that was corporatizing.
Finally, PENN completed the full acquisition of Barstool about three months ago, in February 2023. The big question leading up to that point was, how would a brand that made its bones on being a purely authentic voice for its audience coalesce with a company in the highly regulated gaming space? We got an initial answer last week, which may spell doom for both organizations.
Getting back to last week’s firing, over the course of several Tweets, Portnoy announced that he disagreed with the decision, informed PENN that this could be a “death blow” to Barstool but admits that he now has no say in the operations of the company he built. According to Portnoy, Snowden told him, “PENN is convinced there is a legitimate chance lots of the states would pull their licenses because of this…PENN is a multi-billion dollar company, and without their licenses, they’re a zero dollar company.” That may be true, and maybe that is the greatest evil among several to consider, but the others must also be reflected upon.
After completing the acquisition, PENN explained the rationale for acquiring Barstool as follows, “Barstool is a proven, powerful media brand with an authentic voice and vast, loyal audience that provides us with a strong top of funnel for new customer acquisition and organic cross-selling opportunities across our growing interactive division.” [emphasis added]. Who is that loyal audience that attracted PENN to spend $388M to acquire Barstool (roughly a 4.5x multiple of Barstool’s $86M revenue)? As explained by Roundhill Investments, 65% of Barstool’s audience is between 21 and 44 years old, with 38% between 21 and 34. Barstool’s revenue is a rounding error for PENN (who did $1.6B in FY2022). As such, PENN only cares about the content Barstool produces in as much that it expands the brand among the demographic PENN so badly desires and Barstool is so adept at attracting. The revenue Barstool generates from their content is a bonus, but utterly aside from the point…this is all about customer access.
Improving access to this demographic is so fundamental to their strategy that it is a key metric PENN dedicates time to reviewing with their investors on their quarterly earnings calls.
I would be shocked if something like Mitzy’s errant word led to state gaming boards pulling PENN’s gaming licenses, but I will defer to PENN on this because they clearly know the risks better than I do. However, I seem to have a firmer grasp of the cultural climate, so here is my consulting advice for them.
First, this move has major Streisand Effect vibes here. I give my personal guarantee that 99.5% of people who know about Mintzy’s misstep wouldn’t have known it occurred if it weren’t for his firing. Would state regulators have noticed that a fairly insignificant content contributor at Barstool accidentally uttered the 2023 version of Voldemort? State gaming commissions may be overzealous and drunk on power, but they aren’t omniscient.
Second, we come full circle to my initial thesis. I can’t imagine there will be a Bud Light-like pushback against Barstool for this move. I don’t believe even Matt Walsh has the stones or desire to stake his brand to make a 1st Amendment argument for the n-word. So maybe PENN saved itself from the gaming boards temporarily, but they have just availed itself of the ultimate downfall of its business. On the one hand, the left smells blood in the water. Lefties have had their knives out for Barstool since its inception but were held at bay because Portnoy didn’t care what they thought. Now they know they can take clips of all sorts of content that approaches being edgy and send those diabolical mash-ups to the gaming boards that PENN is so clearly terrified of. When they execute that play (not “if”), PENN will bend the knee and force Barstool to become a sterilized version of itself by devolving into the gaming equivalent of The Hallmark Channel. In turn, the right will try to put another head on a pike and tell PENNs newly acquired brand (whose demographic looks an awful lot like Bud Light’s) to pound sand. This could destroy the only reason PENN bought Barstool in the first place by turning the “pirate ship,” as Portnoy used to call Barstool, into more of a Carnival Cruise ship. 40-something parents of twins may want to take a cruise like that, but no app gambling 20-something wants to.
Additionally, if I was a young content creator at Barstool and now know that an errant word or thought could instantly put me on the unemployment line, wouldn’t I be looking for my escape hatch? In fact, several prominent Barstool personalities expressed their displeasure at the decision.
PENN has put itself in a corner, which I don’t know if they can get out of now. They didn’t learn their lesson from the Bud Light example. Still, if the downfall of PENN occurs the way I predict, hopefully, other companies with similar customer demos will be able to use PENN as their own cautionary tale.
Corporate executives - choose your meal carefully from the buffet of wokeness because if you get a hambone stuck in your esophagus, there likely won’t be anyone there to give you the Heimlich.