The Exchanges

Q Right. And then you ran it, you moved it to New York and you ran the business for a couple of years and obviously things took off. The, the business grew. Was churning group like active at this, this time? Like, were they helpful or was it you building the business and, and they were just kind of quiet financial sponsors? How, how did that, how did that phase go?

A So when they, when they purchased us, uh, they basically gave the money. We did, we weren't great at business. The first thing we did, we went out and hired Erica Nargini as CEO. So she really helped expand the business side of what we were doing. Uh, and we exploded, but churning to answer your question, they weren't involved at all. Um, I think they really, I mean, slightly here or there, if we had a question, I think the biggest thing they did is probably credibility. Like I was probably seen as, uh, and still am at times, like a wild card, like you don't know what you're dealing with and you put the churn and name on it. It's like, oh, these guys are legit. They're real. And maybe helped us get Into meetings and doors, but they weren't in the day-to-day operations at all. Probably, I would say, the best thing they did is they stayed out of our way.

AI assessment note: “churning to answer your question, they weren't involved at all.”

Q But you guys, you guys decided to build, quote unquote, in the wild. Like, you had cameras inside, you made stars of some of the people in there. Was that organic, or was that, that was like an explicit decision? You're like, this could be really interesting, because these people are really odd characters. They'll be, they'll be great for television.

A Yeah, so it was organic in the sense, I started Barstool, and I didn't want anyone to know who I was. It was strictly business. It was a, it was supposed to be like a gambling rag, and I had fake names and all this, but in the early days of the newspaper, It, it slowly shifted that people are much more interested in the personalities behind everything. So by the time we went to New York, we knew with the focus should be on the personalities and the people we had working here. And we have this wild cast of characters and we had an event. We were hiring people that were no one else would ever hire or give a chance. I often say we're one of the first like digital, true digital media companies, like the people we found all the way from Magenta marbles to Pat McAfee to Alex Cooper. McAfee couldn't get a job when he was done punting.

AI assessment note: “it was organic in the sense... slowly shifted that people are much more interested”

Q How successful has it been to launch these products off of Barcelona? So, you know, you've launched a whole line of stuff. What's working and what's not working? What have you learned from that?

A Yeah. Um, what I've learned about our audience And this probably holds true for a lot. It doesn't matter what I say or our influence, it's the product. It's like if, if the product's good, they do well. Like Pink Whitney is a drink that kills it for us. We, uh, Dan Big Cat has a coffee. Now I did a one, excuse me, a one bite frozen pizza. It was the biggest frozen lunch Walmart ever had. It's gone. It's basically disappeared because it wasn't very good. Um, And that's a huge missed opportunity, probably, because I got everybody to eat it, and we had like a million, and not even our crowd. Our crowd's not a Walmart crowd, because a lot of our- You're saying the product sucked.

AI assessment note: “It's gone. It's basically disappeared because it wasn't very good.”

Q This is the question. The question is, Dave, when that business explodes, Are you, are you spending like a few minutes every day saying, God damn, why did I do this deal? Like, or did you think it was really still worth it?

A You know, when the company goes, I never questioned it because again, turn it, we didn't, people always ask me, we did not have people beating down our doors. Like I always, one of the things I've heard throughout the course of Barstool, you should be making so much money here and doing this there and deals there. It's like, I'm looking. No one, I don't see these mythical deals everyone's talking about. Um, and there was no bidding war when churning came around. Uh, so while understanding it, my biggest thing, I'd never sold the company. I wasn't looking to sell a company. When they approached us, they really were looking at, like, our gross revenue, and I didn't care about gross revenue at all. I care about making a profit and putting money in my pocket, and that's how we, that's how we earned our living. They were basing our net worth. They give me like comps of other companies. I'm like, we are way bigger than they are, but they like, well, they've gross sales and all this. It's like, well, they're losing money. Like I, if you want, if I had a year to build up for that sale and I just wanted to inflate our gross revenue, I could have done that easily. I didn't. So we definitely sold it for far less, but at the same time, they were the a, they were one of the only serious offers we had and they stayed out of our way. They, they were, Kind of in a way the perfect partner outsi…

AI assessment note: “So I didn't regret it.”

Q to the pen deal, how did, how did the growth, how did the business go crazy over that three and a half years? Did you invest a lot of capital at that time? I mean, how did the business go from, you know, 12 and a half to half a billion dollars? Is it that you, that you shifted the strategy and said, Hey, let's go after revenue now, or,

A Uh, I think it was, it was probably two major things. We, we, Erica was a perfect hire and built out the business side, and people just totally underestimated us. Like, I knew how big we were, um, and in a weird way, I think a lot of times, even though people know us now, they still are kind of flabbergasted when you go under the hood and see our influence. Like, we, Barstool's around 20 years, so during the time that we sold, I always gave the analogy, and this is old internet, but people throw numbers out and how big their audience was, and it's like if you're watching TV and someone has a remote control, and they're just clicking every, every second, it's like everybody got one view. Like, my, my network has a view, my network has a view, and I'd be telling people, yeah, but ours aren't changing the channel. Like, they're, they're, our viewer is one, they're on the channel for 30 minutes listening, so our influence was just underestimated, so when you, And we did nothing on the business side. Like we really were so busy on creating content and, um, you had to knock down our door to advertise with us. So when we changed that philosophy and like, let's build out the business side, our tech, all of it with our existing audience, it was just kind of like a powder keg that exploded. It didn't shock me to be honest. Granted the original business plan said in five years, they wante…

AI assessment note: “when we changed that philosophy and like, let's build out the business side”

Q ads, but there's kind of, you know, CPG businesses are being launched by Kim Kardashian and Kylie Jenner and, There's an entirely new business model that's emerged with the independent media businesses that have been created over the last decade. And this seemed like a very good example of that. Um, I guess, how did the conversation with Penn start and how did that, that deal kind of come about?

A Yeah. So they changed the laws in the United States. That's what sparked it when they said sports gambling was going to become legal and a state issue. We started, when I started the thing, we were a gambling newspaper, like that's what we were. So when that happened, uh, I, I instantly was like, this is our chance. So we proactively went out and tried to solicit deals. Um, like I had worked with DraftKings. I had worked with FanDuel back then. DraftKings, when there were four people, they offered me stock in the company. They're, they're Boston guys. I remember we sat down and we were kind of building our thing. They were building there. So I knew this space inside and out. Um, We really didn't get any offers. We hired molus, which is like a banking. Yeah, they suck. They absolutely suck. Behind the doors, one of the guys trashed me. So the reason they weren't getting any offers, uh, was because I was like an ass or something to that effect. I caught wind of that still irks me. They got one penny of commission on that sale, but the pen came through. We had a guy, David, uh, who's in the gambling space. Who introduced us to Penn. I had never heard of them, uh, and Erica and I hit it off with Jay Snowden, the CEO, um, and that deal Basically was exclusively negotiated between Jay and I. Erica involved too. Um, Chernin wasn't involved. They didn't really want to talk to Chernin. …

AI assessment note: “We had a guy, David, uh, who's in the gambling space. Who introduced us to Penn.”

Q And then, um, the deal was set up as a two stage, right? Like they bought a piece and then they bought the rest later.

A Correct. Which my understanding of it, It was always going to happen that way. Like, and, and, you know, there are conversations that maybe would have changed our fortunes. Who knows? Like, in the beginning, do we call it Barstool Sportsbook or not? Because some people may not have a taste for Barstool. I argued we should. We'd lose what is one of the great things. I could have been wrong, because dealing with state legislatures and government is up there. Um, but it was always, let's not go all in, right? Right away because we don't want to shock gambling like legislatures. Let's start it slower and say we don't own them and then eventually we'll acquire the whole thing. So that was always the plan and the price points were kind of mapped out.

AI assessment note: “Correct. Which my understanding of it, It was always going to happen that way.”

Q have to start afresh. Do you think that this is a new phenomenon in America, or do you think this has always been the case, and we're just all kind of waking up to it because we're You know, in your case, you're more kind of celebrity now, you're more well-known, and so this is becoming more of an issue for you. Has this always been how things have been?

A I would guess it has been this way far, far more than I realized. Um, I, I think the internet certainly changes a lot of things because people have more voice and more access to information. Um, but I bet it's been like this a lot. I mean, I grew up in a house where like the New York times is gospel and my dad hates Trump. Like my dad hates him, hates him, hates him. My mom hates him, hates him, hates him. And then I came under a tax from like the New York times. And that was confusing for, like, my dad. It's like, he's seeing things that he's like, I don't understand how this is happening, and I'm showing him documented stuff. But yeah, I probably think it has been This way. Because it's about power, really. And power is always something throughout history that people go pretty far to control, maintain. So I would guess this has been going on for a long time.

AI assessment note: “I would guess it has been this way far, far more than I realized.”

Q and puts this person out. They're done. But you haven't been canceled. Why is that? And do you think that we're kind of post cancel culture in America? Was that a moment that's come and gone? Or do you think we're still kind of fighting the fight for free speech in America and the ability to speak one's mind? Um, and speak one's voice without being de-platformed and shut down.

A Yeah, I don't think it's totally gone. I think I'm here just, it, it, Barstool has been around for a long time, so people really do know me, like the fans or, or people who have read Barstool for 20 years have stuck by me, and how, and, and that's been important. Like, if you're on someone else's platform, it's a lot easier to de-platform them because you have advertisers and somebody above who don't want to deal with the headache or anything like that, so I, I've been, even when Penn was here, and there are people above me, theoretically, What choice do they have to have my back? Because it's, it's, well, if you don't have my back, I still have this megaphone. I'm just going to be like, guess what? These guys don't have my back. And then poof, everything they've done. So I've had that luxury of being able to speak directly and not having to worry where if you're just on a different network, they can pull the plug a lot easier. Um, and I, I'm kind of an open book, so it's, I, I think what has worked in my favor, I've never been worried, well, if I speak out or defend myself, what's gonna come out next, or is there someone lurking in the closets? I got, I've never cared. I, everything's out there. I, there's, I, I've told the truth, and, and that's allowed me to be pretty comfortable, like, the heavy accusations, like Business Insider, when, like, sexual misconduct type stuff, l…

AI assessment note: “I don't think it's totally gone. I think I'm here just, it, it, Barstool”

Q Is it hard to build a company of young creative people in New York that abide by the culture that you want? Or do you find yourself pushing up against all kinds of things that you're just like, what are these people asking for? I don't get it.

A No, because we hire, I think the hardest thing is just cost of living and taxes and things like that for, for our employees to live in New York city. It's extremely expensive. Um, we wouldn't run into the, the, the people who, who think in our proper employees for us, they're there. And by the way, we have a cross at Barstool. We have super liberal conservative. We have it all. And they clash internally, like how normal humans would, but it's really the cost of living like in taxes. And, you know, it's just really, really hard. For a young person, you know, you could pay him 200 grand a year, and that is barely enough for someone to live in Manhattan.

AI assessment note: “No, because we hire, I think the hardest thing is just cost of living”

Q Let's go back to your roots for a second. Cause I'm, I'm really curious about this. Do you think that sports gambling has been good for America so far based on how it's been launched, how young men use it?

A Yeah, I mean, I'd say it's new, I wouldn't say it's good or bad. I mean, everyone's doing it. I'm, I'm sure there's horror stories, just like anything, any vice of people would be like, oh, I lost money or whatever, but from my world, I was doing it my whole life, so I was doing it when it was not legal. Um, I'm also a firm believer in let an adult be an adult. Like, if they want to gamble, they do it, but I wouldn't say it's been, it's probably created a bunch of business, like, Because the industry is spending so much, and that trickles down in so many different areas. Um, so gambling's going to happen. There's certain things that I'm pretty Things that have happened since the dawn of man, gambling is one of them, it is going to happen, so you might as well legalize it and make money off of it rather than have it be underground bookies and things like that.

AI assessment note: “I wouldn't say it's good or bad.”

Q right? There's folks like us that have sort of been lucky, good, whatever you want to call it, on the right side of doing well, and then there's all these other people with the potential to do well, but they're constrained somehow, and it's just getting harder and harder. Do you have sympathy for that argument? Do you have any sense of like what should be done to fix that?

A I do. And it's such a hard thing to answer because I do, but I also think at times it's a crutch. Like, so where is that fine balance? And I, uh, I guess the way I've thought about it as an overall philosophy is we should be looking forward, not backward. And there feels like there's a whole lot of how do we fix backwards, but that's not necessarily going to really help forward. If, if that makes sense, like, I mean, California going back and they're looking at like reparations and things like it's, it's, you hear it. It's like, well, how are they going to do that? We already have like crazy inflation. And now you're saying you want to give everybody Like African Americans who fit the criteria is like millions of dollars each. Is that where, what, from where? Like, where is, where is all this coming from? So it's, it's moving forward. And at what point I think a fair question is at what point is like, all right, well, this isn't working. Like we, if you're just consistently going back, you're not going to go forward. That's kind of how.

AI assessment note: “I do. And it's such a hard thing to answer because I do”

Q Was this like Elon take it over Twitter and he kind of goes in. He's like, what the heck is going on here? We got it. Yeah.

A Yeah. From what I heard, uh, or saw stories of that. Yes. I think very similar where, and again, this is always, there's one thing that I clashed with the left. There seems to be like, oh, we shouldn't have to work hard culture. Like, yo, I, I have to work like 10 hours a day or you get what you work for. So we're a great place to work. People would kill to work for Barstool. There's not, and, and we're always find that, like, I had a sales job. Grass is always greener on the other side, but, you know, we do sports, entertainment. It's a great spot to work, um, and if you work hard, you get rewarded, but there is sort of that, I don't know, The shaming of success, earning, whatever you want to call it, I do feel like exists in our, in our country a little bit, and I, I don't know where that came from, but it exists.

AI assessment note: “and again, this is always, there's one thing that I clashed with the left.”