The New York Times Company has agreed a $550m deal to buy sports news business the Athletic.
The deal, which is expected to complete in the first quarter of this year, will bring together two of the world’s largest news subscription businesses.
Meredith Kopit Levien, chief executive of the Times, said the acquisition will help her company surpass its goal of 10m digital subscriptions.
In 2019, the New York Times said it wanted to reach 10m digital-only subscribers by 2025. Aided by reader interest in former president Donald Trump and Covid-19, the Times already appeared likely to meet and exceed this ambition. As of September 2021, it had 7.6m digital-only subscribers. Including print subscriptions, its total was 8.4m.
“We are now in pursuit of a goal meaningfully larger than 10m subscriptions and believe the Athletic will enable us to expand our addressable market of potential subscribers,” said Kopit Levien.
According to Press Gazette’s 100k Club ranking, the Athletic – founded in 2016 – is already the fifth largest news subscription business in the English-language world. It employs roughly 450 journalists who create in-depth sports content in the US, Canada, UK and Europe.
The New York Times confirmed that the Athletic had around 1.2m subscribers as of December 2021. In an investor call, Kopit Levien said there is a “small” overlap between subscribers to the NYT and the Athletic, meaning the deal will significantly add to the company’s paying reader total.
“Alongside our core news report, New York Times Cooking, New York Times Games, Wirecutter and Audm, we’ll have a more robust offering to engage the millions of subscribers we already have and convert many more new ones among our 100m-plus registered users,” she said.
“Ultimately, the Athletic helps further our vision of making the New York Times the essential subscription for every person seeking to understand and engage with the world.”
Despite the Athletic’s strong subscription numbers, the sports news company is loss-making.
Kopit Levien said the Athletic had operating losses of around $55m in 2021 on $65m of revenue. “We currently forecast a slight improvement in operating losses in 2022, as we plan to make additional investments that will mostly offset revenue growth. We currently forecast smaller losses [in] 2023 and 2024 before turning accretive thereafter.”
Kopit Levien believes that the Times, with its experience in digital subscriptions, can guide the Athletic towards profitability.
“We are buying a business whose next phase of growth depends on things we know how to do,” she told investors.
Kopit Levien said the Athletic’s newsroom will be run independently of the New York Times. “Our plan is to sell the Athletic subscriptions as a standalone product at first, and ultimately to also include it in a broader Times bundle.”
The Athletic’s co-founders, Alex Mather and Adam Hansmann, will stay on as co-presidents. They will report to David Perpich, an NYT executive who will become publisher of the Athletic.
As well as further building the Athletic’s subscription business, Kopit Levien revealed plans to enhance its advertising offering.
“In addition to subscriptions, we also see a big, untapped advertising opportunity,” she said. “Much like the one we’ve built in our core business, which is downstream of our subscription business and powered by premium ad products and first-party data.”
Kopit Levien later added: “The Athletic has a small advertising business today. Quite small, fairly limited in terms of what it’s associated with, so I’d regard it as a green field. I would also think about us as people who’ve built the right ad business for a subscription-first business.”
Photo credit: REUTERS/Shannon Stapleton