What Publishers Can Learn From Dave Portnoy

Leave it to Barstool Sports founder & CEO Dave Portnoy to share all of the details about a former employee’s compensation to inspire a discussion about talent compensation.

It started with a podcast episode in which former Barstool employee Grace O’Malley said that she “didn’t make anything while there” and followed up saying she was paid a “decent” salary. Naturally, Portnoy had something to say about it. In a video, he broke down her contract.

She was finishing up her third year at Barstool. Her base salary was $175 grand a year. On top of that, she got 70% of anything we were able to sell on her personal social, so if we had ads and said, ‘hey Grace, do this on your Instagram, she’d get 70% of that.’ So she got another $75,000 in 2024 that way. Total salary for last year… a quarter million, $250,000 to Grace.

He went on to respond to one of O’Malley’s complaints that she got paid less than her friend Brianna LaPaglia with a simple reaction: “Bri was a much bigger personality, much more followers, bigger everything…”

While all of the above is interesting—especially the social media ad component—it’s the part about the proposed new podcast between Barstool and O’Malley that publishers should pay close attention to.

Originally, before this latest blow up, we thought Grace was going to continue with us and launch a podcast with Barstool. What we told her for that is we’ll support you, get anybody you need, hire anybody… Once Barstool makes back your salary, your base salary, $175,000, we’ll split every dollar moving forward 50/50. We’ll be like partners, so there’s a ton of upside for Grace. I thought it was a super user friendly deal, creator friendly deal…

And he’s 100% correct that it was a very creator-friendly deal. It’s how I’ve seen many of these types of deals structured and provide legitimate upside to the creator while also giving the publisher a great asset to monetize. 

Here’s the reality: great content creators have more power than they ever have before. O’Malley has already signed with Alex Cooper’s Unwell Network; Cooper is another former Barstool talent who was likely paid very well and still left to do way more. And if publishers want to continue retaining great talent, they’ve got work to do. 

So, let’s dig into that…

If you read last week’s piece about media fragmentation, I dug into the power that media companies had, in big part, because of the capital expenditure required to operate. I wrote:

This was a massive inflection point because anything a major media company can do, an independent or small team can do nearly as well. It’s the Pareto principle in action where independent upstarts can get 80% as good as the big content organizations with only 20% of the resources.

The institutions are weaker than they’ve been in a very long time—perhaps ever?—and so you have to ask yourself, “Why are my best people going to stick around?” Here are some of the standard arguments:

• We provide distribution & support to the creators.
• We provide a stable salary & benefits.

Both are valid arguments. But let’s not pretend that the salaries are all that great. Portnoy was paying a young content creator who started from nothing $175,000. I hired 40-something reporters in my time at Morning Brew and our starting salary was $75,000. But there are a ton of reporters out there who got their start making like $40,000 in the last decade. Hell, The Atlantic did a story a couple of years ago that found the median salary for a journalist is like $53,600—this means half make less than this by the way.

And on the distribution and support side, that’s sort of dying as well, isn’t it? Semafor reported in a newsletter on Sunday:

According to internal data shared with Semafor in recent weeks, the [Washington] Post’s daily traffic last year reached a nadir of just a quarter of what it was at its peak in January 2021. That month, the Post had around 22.5 million daily active users. But by the middle of 2024, its daily users hovered around 2.5-3 million daily users.

It’s one thing to write knowing that 22.5 million daily active users could see your story… it’s something entirely different to write for 10% of that. So, the distribution isn’t all there. And the support? I love having a reporter on the team who can also edit my stuff. But I survived for five years having my girlfriend edit my writing. Those perks just aren’t as important to a creator as they might have once been.

So, all is doomed, right?

Not exactly. Publishers just need to rethink how they pay folks. Look at the salaries at a media company. The two most important departments—sales and editorial—have a massive pay gap. Sellers are often the highest paid in the company while editorial is the lowest paid. That needs to change.

First up, more publishers need to start identifying who the best talent is in the company and start building product around them. It’s not just about paying them a salary. They need to be thought of as stars and that means building product. Axios does a very good job with this (just look at Axios Communicators).

Second, incentivize accordingly. I suspect Dan Primack and Sara Fischer—two other Axios stars who have their own communities on the way—are doing very well for themselves. Axios is doing even better, but in both cases, the talent is the face of the product and is compensated.

So what makes star talent? They’re monetizable. That might mean their work drives or retains subscribers; that might mean that you can build a show around them and sell ads against the content they create; or it’s a newsletter you want them to write “in their voice.” Whatever the case is, if their work directly results in growth for the business, figure out how to incentivize. Because if they can do it for you, they can also do it for themselves.

You can absolutely structure deals to protect the brand and minimize downside. Portnoy’s strategy of recouping the salary before sharing in the proposed podcast revenue is a smart approach. It’s how I’ve seen many creator contracts work. The publisher will take the risk, but we need to recoup that risk before a true partnership exists. But for star talent, there needs to be a partnership.

The alternative is that the best people will just leave. It’s too easy to launch your own product now. Just look at Helena Bottemiller Evich, founder of Food Fix. She used to be at Politico, but had built enough of a following that she was able to go out on her own. She’s making more than she ever did as a very well-paid senior policy reporter. And there will be hundreds of others like her.

It may be hard to believe for news organizations, but their talent wants to make money. Life is expensive. And they are the ones driving the distribution (it’s the content they create). Obviously it’s easier to monetize a brand like Barstool Sports, but Dave Portnoy is smart in how he compensates. Create similar incentives, give them upside and I suspect more talent will stick around.