Ben Strauss at The Washington Post wrote a story on Tuesday about The Athletic, an interesting read that gives us a bit of insight into the company’s financial health and future.

Why should you care?

Well, the success of The Athletic, or lack thereof, is going to be a defining moment for the sports writing industry, which has struggled in recent years to adapt to changing consumer trends and/or develop stable revenue models. This is the biggest effort we’ve seen at a subscriber-only model in the history of sports media.

A few nuggets from the story that I found particularly interesting:

The Athletic has raised $140 million, is approaching 1 million subscribers and is valued at about $500 million, according to the company. But it’s not yet profitable. It hasn’t released any revenue figures. And it has continued to raise money, including a recent buy-in from actor Matthew McConaughey. In other words, it could represent the idyllic future of sports journalism, a venture capital-backed mirage or something in between.

This has always been the concern, the long-term financial projection and idea of sustainability.

They’ve pulled in a ton of money via these fundraising efforts, but the subscriber model, it would seem, is not producing enough revenue to make these cash infusions unnecessary. If it was, you’d think that would have been made public or disclosed in an interview by now. At some point, the site is going to have to support itself, unless investors continue to dump money into the product on the basis of altruism and benevolence alone.

Another section from the article:

In interviews, multiple investors, along with media executives and industry insiders, said companies that value local consumers could make interesting potential buyers for the Athletic. Among the companies they mentioned: Sinclair Broadcast Group, which just spent more than $10 billion on more than 20 regional sports networks; Fox Sports, which doesn’t have much of a digital footprint after eliminating its writers; Comcast, which owns a handful of regional sports networks; and ESPN, because it’s ESPN.

No substantive negotiations have taken place, a person at the Athletic said, though some media companies have reached out. According to three members of the industry, conversations took place with Fox Sports but didn’t advance. The Athletic declined to comment on that, as did Fox Sports. A senior employee at ESPN said the company had no interest in the Athletic, particularly at its current valuation.

“It’s too soon to know if it’s just a good idea or if it’s a long-term viable business,” one investor of the Athletic said.

This doesn’t make much sense to me, these “conversations” with Fox Sports.

If you go back to the beginning, The Athletic built a foundation by bringing in people who were disenfranchised with their newspapers or laid off by ESPN, Sports Illustrated, or other outlets. Founder Alex Mather came out a few years ago saying he was going to “wait every local paper out and let them continuously bleed.” He was going to “suck them dry of their best talent at every moment” and  “make business extremely difficult for them.”

If The Athletic reaches a point that they’re just selling the product back to one of the companies that provided a source of talent for them to pull from, then doesn’t that defeat the purpose?

We’ll see. I’m a subscriber and think there’s a lot of great work being done on the site, but I wonder if long term sustainability is possible.