Cancel Me If You Can
Building a media company — Dave Portnoy on taking Barstool Sports from a free Boston newspaper to a $650 million sale and back again for one dollar: finding talent, selling ads, doing deals and refusing to back down.
Mechanisms
Know your weekly nut
Portnoy moved home, cut every other expense and reduced the business to one number.
"At this point the business model was pretty simple: if I could sell $3,400 worth of ads in the newspaper, I would break even."
Why it matters
Portnoy moved home, cut every other expense and reduced the business to one number. Every week was a fight to hit it. A single break-even target tells you exactly how much selling the week requires.
Use when: You're running a new venture on thin cash and the finances feel vague.
Sell the ads before the paper exists
Portnoy pitched Hooters and gambling companies on one thing: his paper would reach men aged twenty-five to thirty-five, their exact customers.
"How do you sell ads for a newspaper that doesn’t exist? On promises."
Why it matters
Portnoy pitched Hooters and gambling companies on one thing: his paper would reach men aged twenty-five to thirty-five, their exact customers. A tight audience promise was enough to bring in revenue before the first issue printed.
Use when: You need paying customers before you have a finished product.
Call every advertiser your competitors have
Competitors' pages are a free, pre-qualified list of businesses that already pay for exactly what you sell.
"I’d sift through all my competitors’ publications in Boston and call every single one of their advertisers every single week to poach them to Barstool."
Why it matters
Competitors' pages are a free, pre-qualified list of businesses that already pay for exactly what you sell. Portnoy worked the list weekly instead of hunting for new categories of buyer.
Use when: You're looking for your first customers and your competitors publish who theirs are.
Keep it skeleton until demand proves itself
The Blackout Tour started as a sponsor's free frat parties with blacklights from Spencer's Gifts and a house DJ.
"It was a skeleton structure that we would add only a few minor bells and whistles to as the tour picked up steam."
Why it matters
The Blackout Tour started as a sponsor's free frat parties with blacklights from Spencer's Gifts and a house DJ. Portnoy rented equipment at first and only bought lasers and cannons once ticket sales kept rolling in.
Use when: You're launching an experiment and want to spend on production before you know anyone will come.
Give each crowd its own night to win
One generic Boston show would have competed with itself.
"Well, each show was assigned to a different college. So Monday was Barstool Blackout BC, Tuesday was Barstool Blackout BU, Wednesday was Suffolk, Thursday was Northeastern, etc." "Pretty clever marketing on our part because each school wanted to brag that they had the best party."
Why it matters
One generic Boston show would have competed with itself. Branding each night to a rival school turned school pride into demand, and the House of Blues sold out five straight nights.
Use when: You're selling the same event or product to several groups that compete with each other.
Show them the engine, skip the pitch
The data showed most readers typed in the URL directly and stayed, refreshing all day like it was a fantasy sports site.
"So the only thing I really did was give them access to our Google Analytics numbers so they could see what was under the hood."
Why it matters
The data showed most readers typed in the URL directly and stayed, refreshing all day like it was a fantasy sports site. That stickiness made the case better than a deck could have.
Use when: You have a metric that proves your value better than any presentation.
Name the one term you'll walk over
During the Penn sale, Portnoy demanded a $7 million bonus for a partner whose equity hadn't paid out.
"What Chernin didn’t get at first is that this wasn’t a negotiation. It was take it or leave it. You either give Dan the $7 million signing bonus or I walk from the deal."
Why it matters
During the Penn sale, Portnoy demanded a $7 million bonus for a partner whose equity hadn't paid out. Chernin first refused, then tried to split the cost with him. With the whole deal at stake, they paid.
Use when: You have one term you're truly willing to walk away over and the other side treats it as negotiable.
Arguments
Rising nobodies beat established stars
Portnoy paid an unknown $20,000 for an entire spring tour and had a great time.
"In twenty years of doing this shit, I’ve learned that it is far easier to work with nobodies or people who are on their way up than established stars." "But the more you pay people, the more they feel that they’re doing you some kind of favor."
Why it matters
Portnoy paid an unknown $20,000 for an entire spring tour and had a great time. On the next tour he paid established acts over $100,000 a show, and they arrived late and didn't care. The money bought less commitment.
Use when: You're deciding between a proven big name and a hungry up-and-comer.
Concepts
Direct visitors are worth more than clicks
Portnoy turned down a link-sharing program that would have padded traffic.
"They were direct, intentional visitors who knew where they were going and what they wanted to find."
Why it matters
Portnoy turned down a link-sharing program that would have padded traffic. Drive-by clicks didn't buy T-shirts. People who came on purpose bought merch, commented and stayed, and that was what investors paid for.
Use when: You're tempted to inflate traffic or user numbers with visitors who don't care about you.
The SNL model: launch stars and expect them to leave
Pat McAfee, Alex Cooper and others built their brands on Barstool and left.
"We want to create superstars, and if they leave for more money or better opportunities, that just proves our business model works and helps us find the next star."
Why it matters
Pat McAfee, Alex Cooper and others built their brands on Barstool and left. Portnoy treats departures as proof of the system. Treating them as betrayals would push the company to hoard talent it can't hold.
Use when: Your best people keep getting poached and you're deciding whether to fight it or build around it.
Evidence
Find out what's actually selling the tickets
Paying for far bigger acts sold exactly the same number of tickets as the cheap tour, and fans wanted photos with Portnoy.
"The other (and more important) thing I learned was that Barstool was driving the ticket sales; not the artists."
Why it matters
Paying for far bigger acts sold exactly the same number of tickets as the cheap tour, and fans wanted photos with Portnoy. He swore off paying for outside talent. The next tour used in-house people and cleared about $200,000 a night.
Use when: You're paying a premium for an outside draw and haven't tested whether your own brand is the real pull.
Take the deal when the timing and the partner are right
Portnoy expected the talks to end at $7.5 million.
"The opening bid from Peter Chernin and Mike Kerns was $7.5 million for 51 percent of the company, and I would retain all creative control over the content. It wasn’t just low; it was embarrassingly low." "The timing was right and the number seemed right. It wasn’t even close to what the company was actually worth, but it all worked out in the end."
Why it matters
Portnoy expected the talks to end at $7.5 million. Chernin came back at $12.5 million. He took it for $5 million of personal security, an end to his personal liability, equity his partners could cash in and an investor he trusted. Five years later the company sold at a $650 million valuation.
Use when: An offer undervalues you but solves your real constraints and comes from a partner you trust.
Buy it back for a dollar
Penn needed a money-losing asset gone to pursue its ESPN deal.
"At the time, Barstool was losing close to $12 million a year. I would buy the entire company back for one dollar, taking us off Penn’s books and inheriting all the expenses."
Why it matters
Penn needed a money-losing asset gone to pursue its ESPN deal. Portnoy offered to take on the losses in exchange for ownership, plus a ten-year promise not to disparage ESPN Bet. A buyer's need to unload can be worth more than the price.
Use when: The owner of something you want is under pressure to get rid of it.
Passages
The job ad that filters for love of the game
Only a few people answered.
"Barstool is looking to hire writers. We don’t pay at all, but we make up for it by offering zero benefits."
Why it matters
Only a few people answered. Three of them became the original "Core 4" with Portnoy, and one still writes for Barstool two decades later. A blunt ad screens out everyone except the people who would do the work anyway.
Use when: You can't pay yet and need contributors who care about the work itself.
When the partnership splits, ask for the IP
Call Her Daddy's two hosts held out on their contract together.
"“I don’t want Sofia, even if she decides to take the deal. Can I get the entire IP for myself if I honor the deal?”" "“Sure,” I said. Sofia had dragged her feet. You snooze, you lose. Better to have one than none."
Why it matters
Call Her Daddy's two hosts held out on their contract together. When Alex Cooper asked to take Portnoy's offer alone, he agreed and kept the show. Splitting a joint holdout gave him a deal with the party who wanted one.
Use when: You're negotiating with a group that is holding out and one member wants to settle.
Rules
Hire for a track record of output
Big Cat was a caller to Portnoy's radio show who already ran his own Chicago blog.
"I needed to see that prospective hires were consistent over time; that they had been updating and adding to their own blog at a pace and frequency that were within the realm of how we did things at Barstool."
Why it matters
Big Cat was a caller to Portnoy's radio show who already ran his own Chicago blog. Portnoy knew within seconds that he was the hire. An existing body of work at your pace beats any interview.
Use when: You're hiring for a role where sustained output matters and candidates can show what they've already made.
Let talented people run wild
Jenna Marbles' breakout video, made on her own, became the most viral thing a Barstool employee had ever released.
"For months, I had tried to guide, nudge, and suggest what Jenna should do for content. The work that came from those efforts was okay… nothing great or memorable." "…the lesson here was simple: hire great, talented people and let them run wild."
Why it matters
Jenna Marbles' breakout video, made on her own, became the most viral thing a Barstool employee had ever released. Portnoy's direction had produced nothing comparable. Talent does its best work on ideas the boss couldn't have come up with.
Use when: You've hired someone strong and catch yourself steering their ideas.
Match the expectation the video set
The Iowa recap video made the party look bigger than it was, and frats across the country emailed asking to book it.
"But one thing was very clear to me: we needed to have the same special effects that the Iowa video did. That’s what these kids were expecting."
Why it matters
The Iowa recap video made the party look bigger than it was, and frats across the country emailed asking to book it. Portnoy saw that the video had become the product promise, so every stop had to deliver CO2 cannons.
Use when: Your marketing has set an expectation and the actual product hasn't caught up.
Don't beg for investment
Portnoy wasn't looking for money when the Chernin Group approached.
"If you ever have to beg for an investment, if you feel like a used car salesman during the process, if you aren’t 100 percent comfortable saying yes to a deal, then don’t do it. Investment should never be a last resort or come out of desperation."
Why it matters
Portnoy wasn't looking for money when the Chernin Group approached. He gave them access to his analytics and nothing else. Being able to walk away is what let the price rise.
Use when: You're raising money and the process feels like pleading.
Your investors are business partners
This is the reference Portnoy gives founders.
"The Chernin guys did what they said. They gave us money. They gave us credibility. They stayed out of our way. But they will run you over if they think it’s in their best interests."
Why it matters
This is the reference Portnoy gives founders. Chernin turned a $12 million stake into about $250 million and never offered him a raise or held a celebration. Expecting loyalty would have turned a good deal into a grievance.
Use when: You're taking money from investors and want to know what to expect from them.
Pay before they ask
Portnoy saw the other side of this with Chernin, who never offered him more.
"If I think an employee of mine deserves a raise, I give it to them often before they ask for it." "The way I do things is if you’re killing it, I renegotiate and pay you more."
Why it matters
Portnoy saw the other side of this with Chernin, who never offered him more. He was ready to walk away from his own company. Unprompted raises keep strong performers from shopping themselves around.
Use when: Someone on your team is clearly outperforming their deal and hasn't brought it up.
Keep the name in-house
His sales team had agreed to lease the One Bite name to a pizza maker for ad dollars.
"Why would I give the IP to somebody else? If I was going to make a frozen pizza, I wanted to own the pizza and the name and not let somebody else get rich off my IP."
Why it matters
His sales team had agreed to lease the One Bite name to a pizza maker for ad dollars. Portnoy stopped the deal and restructured it so Barstool owned the product. He then had to admit on camera that the first version tasted bad.
Use when: A partner offers easy money to put your brand on their product.