How Barstool's Ex-CEO Built a Brand Amid Controversy

Key Concepts

Turnaround Companies: Businesses requiring significant strategic, operational, or financial restructuring to restore profitability and growth.
Emergent Platforms: New digital or media channels (e.g., podcasting, live streaming) identified and leveraged early for growth.
Creator Economy: An economic model centered around independent content creators, influencers, and their ability to monetize their audience.
Content Engine: A strategic approach where content creation drives audience engagement, community building, and ultimately, product sales or brand partnerships.
Optionality (in business strategy): Designing a business to have multiple viable paths for future growth, acquisition, or monetization.
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): A measure of a company's operating performance, often used in valuations.
PASPA (Professional and Amateur Sports Protection Act): A U.S. federal law repealed in 2018, which previously prohibited sports betting in most states. Its repeal opened the door for widespread legal sports gambling.
JV Partnerships (Joint Venture Partnerships): Collaborative business arrangements where two or more parties pool resources to achieve a specific goal.
Apprenticeship (in career development): A learning model where individuals gain skills and knowledge by working under experienced professionals.
Work Like a Girl: Erika Ayers Badan's personal brand and community initiative focused on professional women.
Farm System (talent development analogy): A system for identifying, nurturing, and developing new talent, ensuring a continuous pipeline.
Conversion (in e-commerce): The process of turning website visitors or audience members into paying customers.
Synergies (in acquisitions): The combined value and performance of two companies post-acquisition being greater than the sum of their individual parts.

Erika Ayers Badan: From Barstool Sports to Food52 – A Masterclass in Turnaround and Media Evolution

Erika Ayers Badan, currently the CEO of Food52 and formerly the CEO of Barstool Sports, is presented as a master of turnaround companies, a great leader, and a communicator with massive ambitions. Her career trajectory, including her deep involvement in lacrosse as a former college player and board member of the Premier Lacrosse League (PLL), highlights a strategic approach to business and personal growth.

The Strategic Pivot from Barstool Sports to Food52

Erika's decision to leave Barstool Sports in September 2023, after selling it twice in the same year (first to Penn National, then buying it back for Dave Portnoy for $1), was driven by a sense of completion. She felt she had achieved everything she set out to do, including two exits in a single year and returning the company to Dave Portnoy, whom she considered the "right steward" for the brand. Her motivation for the pivot was to seek a new adventure and build something again, as she found marketing to 18-24-year-old men no longer "crazy stimulated" her. Drawing from her book, she emphasized leaving when things stop scaring you, and moving into the women's space, home and lifestyle, and manufacturing was "sufficiently scary."

The Unconventional Genesis of Barstool Sports Leadership

Erika's entry into Barstool Sports was serendipitous. While raising money for her music startup in Los Angeles, she encountered The Chernin Group, who mentioned their investment in Barstool. Already familiar with the brand from her time living in Boston, she felt a strong, almost "jealous" pull to the opportunity, despite expecting them to hire a "white guy with an MBA and a vest." She aggressively pursued the role, eventually connecting with Dave Portnoy three months later. Notably, she was hired after approximately 70-75 men had been interviewed for the CEO position.

At the time of her joining, Barstool was a nascent operation with less than $5 million in revenue, around 14 employees, no proper office, and uncertain payrolls.

Barstool Sports: Building "The Machine" and Exponential Growth

Under Erika's leadership, Barstool Sports transformed from a sub-$5 million revenue company with fewer than 15 employees to approximately $250 million in top-line revenue. Key drivers of this growth, referred to as "the machine," included:

Early Adoption of Emergent Platforms: Barstool excelled at identifying and leveraging new platforms at their inception. For example, they heavily invested in podcasting between 2014-2016 when larger broadcasters were hesitant due to low monetization, allowing Barstool to produce a high volume of low-cost podcasts. They similarly capitalized on live streaming platforms like Facebook Live and Periscope.
Authentic and Unfiltered Programming: The company focused on creating content that resonated with young men who sought opinions and scores in the same context, moving away from traditional, "preached at" sports media like SportsCenter.
Efficient Content Circulation and Monetization: Barstool built the capability to quickly clip, post, promote, circulate, and monetize its content across various channels.
Creator-Centric Model: Dave Portnoy and his core team possessed a "very good eye for talent," discovering unique personalities (e.g., Frank the Tank) and pairing them with platforms, even alongside established figures like Alex Rodriguez or Deion Sanders, creating "captivating" and "weird" content.
Culture of High Productivity: Erika fostered a company culture emphasizing a high degree of productivity and a high volume of output, leading to numerous "at bats" and increasing the chances of success.

Erika's leadership style was characterized by openness to "wild ideas," a focus on finding a "yes," and providing productive feedback. The brand's immense power was evident in its widespread recognition, often surpassing that of traditional sports teams.

The Penn National Deal: A Strategic Match, A Cultural Mismatch

Barstool's rapid growth, exceeding investor projections by reaching $25 million in revenue in 2.5 years (vs. 4-5 years), was fueled by diverse revenue streams including ads, merchandise, subscriptions, and pay-per-view. The business was strategically built with "optionality" for either a media company or a gaming/gambling acquisition. The repeal of PASPA (Professional and Amateur Sports Protection Act) by the Supreme Court, which allowed states to regulate sports betting, made the gaming path particularly attractive.

Penn National emerged as a suitable partner, needing a brand and possessing a large regional casino footprint, infrastructure, and state licenses. Barstool, in turn, offered a proven ability to drive customers. Erika strategically reduced Barstool's gambling partners from five to one over three years to create competition and demonstrate their customer acquisition prowess.

The acquisition was valued based on a multiple of EBITDA, a healthy and growing ad business, and exponential growth across all metrics (ad revenue, audience, podcast downloads). However, the brand's controversial nature resulted in a "discount" on its valuation.

Ultimately, the partnership proved to be a cultural and operational mismatch:

Regulatory Constraints: Penn's business, reliant on government licenses, necessitated a cautious approach, often asking Barstool to "just be quiet," which was "antithetical" to Barstool's loud, controversial DNA.
Business Model Disparity: Penn operated as a cash-driven business with high predictability (e.g., counting coins in casinos), whereas media revenue is inherently unpredictable, leading to constant pressure for Erika to forecast revenue with high certainty.

In hindsight, Erika believes Fox would have been the "right home" for Barstool due to its intrinsic media DNA, or potentially DraftKings/FanDuel, despite similar challenges to Penn. She remains "grateful" for the Penn deal, as it "changed everyone's life," rewarded investors, and allowed Barstool to return to private ownership.

Navigating Controversy and Cultivating Talent

Managing Barstool's controversial nature required "thick skin" and an acknowledgment that creating daily content from a "blank page" inevitably leads to missteps. Erika described Dave Portnoy as "truly brilliant," decisive, and possessing incredible instinct, and she trusted him deeply, finding him "super forthright" with both her and his audience.

Erika's personal brand, characterized by "real talk" and transparency (as reflected in her podcast "Work" and book "Nobody Cares About Your Career, Why Failure Is Good, The Great Ones Play Hurt, and Other Hard Truths"), stems from her upbringing in a "locker room" environment and a natural curiosity. She observes a "lack of management talent" and authenticity in the modern workplace, partly due to COVID's impact on feedback and in-person learning, advocating for work as an "apprenticeship."

Her approach to talent management at Barstool was akin to "athlete contracts," where high performers like Alex Cooper saw their contracts "ripped up and new ones created." She viewed talent leaving as "graduating to something bigger," comfortable with Barstool serving as a "springboard." A key to their success was a "great farm system" for scouting and developing new talent, ensuring "always a new crop." Her strategy for retaining talent involved providing "every possible piece of ammunition," offering the power of the parent brand, having their back during mistakes, and ensuring "the money shows up." She also believes healthy competition is crucial for talent development.

Food52: Building a Content-Driven E-commerce Ecosystem

Food52, founded around the same time as Glossier, evolved from a blog into a shop and product line, centered on "food as the center of a well-lived life." It curates artisanal products with an "elevated aesthetic" specifically for home cooks.

Erika's investment pitch for Food52 highlights:

Market Opportunity: The internet is "eating the middleman" in the home, food, and decor space, creating a void between mass-market retailers (Amazon, Target) and high-end boutiques. Food52 aims to occupy this differentiated, aspirational middle ground.
Content Engine & Ecosystem: By creating a content engine that surfaces artisans, makers, interior designers, and stylists, Food52 builds an ecosystem with "cache, differentiation, aspiration, and appeal," reducing dependence on platforms like Facebook and Google.
Community-Driven Commerce: Food52 fosters "ongoing conversations" within specific communities (e.g., her "Work Like a Girl" Slack group for professional women, or communities for stay-at-home moms and interior designers) to organically integrate and sell products.

Food52's revenue model includes selling curated artisanal products, manufacturing and developing its own lines (lighting, textiles, furniture), and brand partnerships (e.g., Porsche). This multi-faceted approach allows for "three lines of business in one Instagram story."

Erika was attracted to Food52 as a "turnaround" opportunity, specifically the challenge of serving 25-54-year-old women—a demographic she sees as "underpenetrated," "underserved," with "huge spending power" and influence. Her turnaround strategy involves significant cost reduction, restructuring, refocusing, rehiring, and changing the company's DNA. This experience has broadened her expertise, making her "more viable" by adding manufacturing, international shipping, product development, and e-commerce to her knowledge base.

Future Aspirations and Hard Truths

Post-Barstool, Erika deliberately avoided staying in sports or gambling, or becoming a "cog in a really big machine." Her connection to Food52 came through The Chernin Group, the same investor as Barstool, and her prior board membership provided firsthand insight into the opportunity. She prefers organic growth, building a vision, executing, and diversifying revenue streams on a low-cost basis, viewing acquisitions as an "incredible accelerant" but joint ventures as "tough."

As a board member, Erika is "high energy," "passionate," and "opinionated," asking "a thousand questions" and aiming to help companies identify opportunities they might miss internally, while also protecting shareholders.

Her involvement with the Premier Lacrosse League (PLL) dates back to 2016 when Paul and Mike Rabil sought her advice on creating a new league, inspired by the poor conditions of MLL players. She saw immense potential in lacrosse due to the "bananas" amount of money and effort parents invest in youth sports, and the sport's low barrier to entry. She advocates for growing the sport through youth engagement and making it affordable. She is particularly passionate about the Women's Lacrosse League (WLL), believing its players will become bigger stars than the men due to their drive, captivating presence (e.g., Charlotte North), and willingness to cultivate their brands, similar to WNBA stars. She emphasizes the need for controversial figures to generate interest.

In the next 3-5 years, Erika envisions Food52 finding a home within a larger company, either a retail entity seeking product differentiation or a media company looking for diverse revenue lines and e-commerce expansion. Her long-term dream job (5-7 years) is to be a college professor teaching business or marketing, or to build a conference for women around culture, home, and lifestyle.

Drawing from her book, "Nobody Cares About Your Career, Why Failure Is Good, The Great Ones Play Hurt, and Other Hard Truths," Erika shares profound insights:

Embrace Failure: "The better you can be failing is the better you'll be winning." She uses the baseball analogy, where failing 70% of the time can lead to the Hall of Fame, highlighting the importance of optimism and resilience.
Take Initiative and Be Generous: She encourages people to put themselves out there, take initiative, and be "generous in their questions, generous in their thinking, generous in their effort." She believes that "the more chances you take, one of them is gonna hit."

Rapid Fire Insights

Deal-making style: Fast
More important: Data or Gut? Gut
Dream deal-making partner: Dave Portnoy
Best advice on deal-making: "No is the second best answer to Yes."
Worst advice: "Hang in there."
Hype songs: "I'm Coming Out" by Diana Ross, "The Veldt" by Deadmau5
One sport to watch: Tennis
Team/person to win championship: Carlos Alcaraz
Last meal: New Haven Pizza and blueberries

Synthesis and Conclusion

Erika Ayers Badan's career is a testament to strategic leadership, adaptability, and a relentless pursuit of new challenges. Her journey from scaling Barstool Sports into a media powerhouse to orchestrating the turnaround of Food52 demonstrates a consistent ability to identify market opportunities, build robust content engines, and cultivate talent. Key takeaways include the importance of leveraging emergent platforms, fostering a culture of high output, and understanding the nuances of different business models and regulatory environments. Her experience with the Penn National deal serves as a powerful case study on the complexities of cultural integration in acquisitions. At Food52, she applies her expertise to build a community-driven e-commerce ecosystem for women, emphasizing organic growth and diversified revenue streams. Fundamentally, Erika's philosophy, rooted in embracing failure, taking initiative, and maintaining authenticity, offers actionable insights for anyone navigating the dynamic landscape of business and career development.

How Barstool's Ex-CEO Built a Brand Amid Controversy | The Deal