(Bloomberg) -- Barstool Sports has a plan for surviving the digital media doldrums: boxing and booze.
The sports and lifestyle website geared toward young men has raised an additional $15 million from majority owner Chernin Group, an investment firm led by former News Corp. executive Peter Chernin. Barstool plans to use the funding to create new properties -- like branded alcohol or even its own bar -- and expand Rough N Rowdy, an amateur-boxing promoter it recently acquired, founder Dave Portnoy said on Tuesday.
Barstool, which has been the subject of controversy for hosting content considered sexist, also plans to roughly double its staff to 160 by hiring more writers, video producers and podcast hosts. The New York-based startup also plans to start selling subscriptions to fans who want exclusive content tied to its podcasts or online Q&As with talent and personalities, according to Chief Executive Officer Erika Nardini.
The latest funding “gives us the freedom to follow our instincts,” Portnoy said in an interview.
Like its peers, Barstool Sports is seeking new lines of business to survive a difficult climate for digital media companies. Google and Facebook are vacuuming up most of the online advertising dollars, and Facebook just announced plans to limit publishers’ content on its popular News Feed.
Six Figures
The latest funding round values Barstool Sports at about $100 million, according to a person familiar with the matter. That’s less than digital media giants like BuzzFeed, which was said to be worth $1.7 billion after a funding round in 2016, or Vice Media, valued at about $5.7 billion in June.
Barstool Sports is profitable, Nardini said, without disclosing financial figures. Portnoy said he wants the company to be valued at $250 million in the next three to five years.
The Chernin Group, which bought its majority stake in January 2016, has invested about $25 million in the website so far, Nardini said.
“The company has far exceeded our plans and all our models,” said Mike Kerns, president of digital at the Chernin Group. “There are a lot more areas we need to invest in.”
Kerns said Barstool Sports will probably enter new lines of business through acquisitions. In December, the company sold 34,000 pay-per-view packages for as much as $15.99 each for an amateur boxing match in West Virginia. Barstool wants to host boxing matches in “every state we can get licensed,” Portnoy said.
Sparking Backlash
The growth of Barstool Sports hasn’t been without controversy. In October, ESPN2 canceled the show “Barstool Van Talk” after only one episode following a social media backlash over why the Walt Disney Co.-owned network was affiliated with a company that makes offensive remarks about women.
Among the features on Barstool Sports in the past year was an article titled “Grading the Newest Sex Scandal Teacher,” in which a female teacher accused of having sex with a student was given letter grades based in part on her appearance.
Barstool Sports also asks prospective employees to sign an agreement acknowledging they’ll be exposed to “offensive speech” on issues of sex, race, and gender, among other topics.
Nardini said that while Barstool Sports has a “zero tolerance policy” on harassment, it includes the clause to ensure a creative environment and “protect the nature of a writer’s room.” Portnoy said the company had learned lessons from the recent controversies.
“We’re much more aware that maybe we don’t live in a bubble,” he said. “There’s a sensitivity that we’re not just talking to our little group anymore.”
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