New York Times profits drop as Athletic acquisition weighs on bottom line

New York Times adds 230k subscriptions, but profits hit by The Athletic

new york times athletic

Profits at The New York Times Company have dropped year-on-year due to losses from sports site The Athletic which it bought for $550m in January.

In its Wednesday earnings release for Q2 2022 the NYT Co. reported revenue up 11.5% year on year to $555.7m (£455.4m) but operating profit down $7.2m to $51.7m due to losses at The Athletic.

The New York Times’ subscriber growth

Subscription revenues increased 13.1% year-on-year to $383.6m (£314.7m), “primarily due to growth in the number of subscribers to the Company’s digital-only products and the benefit from subscriptions graduating to higher prices from introductory promotional pricing, as well as the inclusion of subscription revenue from The Athletic,” the company said.

Subscription revenue from digital-only products increased 25.5% to $238.7m (£195.8m) year-on-year; print subscription revenue, in contrast, dropped 2.8% to $144.9m (£118.9m).

The company added approximately 180,000 digital-only subscribers, and 230,000 digital-only subscriptions, in the quarter.

Subscriber numbers now stand at 9.17m and subscription numbers at 10.56m, an increase of 0.68% and 1.64% over the last quarter, respectively. (The company’s 1.2m new subscribers from The Athletic were first reflected in its Q1 2022 results.)

Chief executive Meredith Kopit Levien said in a statement: “we are making palpable progress on our strategy of becoming the essential subscription for every English-speaking person seeking to understand and engage with the world.”

NYT advertising growth (and shrinkage)

Advertising growth of 4.1% in the quarter was driven by print advertising, revenues for which increased 15.1% to $48.1m (£39.5m).

Despite a year-on-year decrease of 2.4% digital advertising remained the bigger cash generator however, pulling in $69.3m (£56.8m).

Digital advertising represented 59% of NYT Co. advertising revenues in Q2 2022, compared with 63% in Q2 2021.

“Digital advertising revenue decreased primarily as a result of the macroeconomic environment, a reduction in marketer spend on advertising adjacent to news coverage given the current news environment, and fewer programmatic advertising impressions,” the company said.

“Print advertising revenue increased primarily in the entertainment and luxury categories, which were more severely impacted by the Covid-19 pandemic in the second quarter of 2021.”

The Athletic: doing a bit better than expected

Revenues at The Athletic totalled $19.5m (£16m) in the quarter, most of which came from subscriptions. Its adjusted operating costs were $32.1m (£26.4m), “largely from cost of revenue, which is primarily related to journalism costs.”

Kopit Levien said on the earnings call: “we have moved faster than initially anticipated in adding it to the bundle” subscription offering, meaning “we expect the impact of The Athletic on this year’s consolidated profit will be less negative than we forecasted at the time of acquisition.”

The Athletic saw a net increase of 50,000 standalone subscribers in the quarter; bundled access with a NYT subscription “late in the quarter” added a further 420,000 subscribers to the audience.

[Read more: Is the Athletic worth $550m? How NYT deal compares with other news media valuations]

‘Other revenues’

Kopit Levien said on the call that Wordle, bought by the NYT in February this year, had driven Q2 2022 to be “our best one yet for games net additions”.

“Weekly active users of Wordle have come down off the peak as expected but they remain high and we have successfully capitalised on portal demand to drive engagement with our broader portfolio of games.”

The number of people playing more than two games in a given week “has nearly doubled quarter-over-quarter”, she said.

She declined to break down how many people had subscribed specifically to the company’s news product versus its other products. That information was also omitted from the earnings release.

The New York Times added more subscribers to its cooking and games sections in the last quarter of 2021 than it did to the flagship news product.

Picture: Reuters/Shannon Stapleton via Getty Images

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