Founded in 2016, The Athletic has amassed 1.2 million subscriptions by looking to leverage the expertise of editorial staffers cut loose by faltering local newspapers around the country. For the Times, the aggressive M&A move is seen as a way to boost its prospects of reaching a goal of 10 million subscribers by 2025.
“Acquiring The Athletic puts us in a position to be a global leader in sports journalism and offer English speakers around the world another reason to turn to the Times Company to meet their daily news and life needs,” CEO Meredith Kopit Levien said in the deal announcement. She described The Athletic as a “stand-alone product” that will be “a great complement” to the “distinctive sports coverage” of the company’s main flagship.
After on-again, off-again conversations in recent months, the New York Times Co. has reportedly agreed to acquire digital sports media brand The Athletic for $550 million.
The Information, citing a source familiar with the deal, said it was sealed despite ongoing losses at The Athletic. The startup had $47 million in revenue in 2020 while it burned through $41 million.
Axios had also explored a potential acquisition of The Athletic, but those talks did not last. After things went quiet for a time last year, the New York Times Co. resumed negotiations on an exclusive basis in December.
Axios also reported the news of the Times deal, following The Information, indicating that a formal announcement was expected after the close of the stock market today.
The Athletic, which was founded in 2015, has looked to prosper from the decline of local newspapers. It has scooped up dozens of well-established names from the sports departments of papers across the country, charging subscribers $72 a year to access their reporting on local teams.
The transaction is aimed at boosting the effort by the Times to reach 10 million subscribers by 2025. As of September 30, it had 8.3 million across print and digital.
Due to its aggressive expansion and staffing up — a process that slowed in 2020 amid the pandemic shutdown of sports, when staff was cut — The Athletic does not expect to become profitable until 2023. It has about 600 full-time staffers, most of them in editorial jobs.
The deal for The Athletic comes amid a flurry of M&A transactions, many of them involving digital media. BuzzFeed just went public via a special-purpose acquisition company (SPAC) merger, and Vox Media acquired Group Nine Media in an all-digital deal.