Breaking news in the media world.
The New York Times Co has agreed to acquire subscription sports site The Athletic in a deal valued at around $550 million, according to a person familiar with the situation.
The deal is a major acquisition for the Times, giving it a new pocket of subscription customers to the New York Times, which has set an ambitious goal of reaching 10 million subscribers by 2025. As of Sept 30, the Times reported 8.3 million digital and print subscribers.
This had been rumored for some time. As of three weeks ago, there was a report via Front Office Sports that the NYT was “reconsidering” an Athletic bid, after initial discussions dating back to the summer failed to result in a purchase. The Athletic, which runs off a subscriber-only business model, had yet to turn a profit and brought in an investment banking firm to help find a buyer. Other potential suitors were rumored to be Axios and gambling companies such as DraftKings.
Here in Philadelphia, The Athletic has a half dozen or so employees. Derek Bodner recently left to start his own website, so we went from three Sixers writers to just one, but the other sports are covered by Zach Berman and Bo Wulf (Eagles), Matt Gelb (Phillies), and Charlie O’Connor (Flyers). Philly-based Sheil Kapadia took on a role as more of a national NFL writer and Meghan Montemurro left to cover the Cubs for the Chicago Tribune.
It’s interesting from a macro-level viewpoint because it would have been pretty ugly if the bubble had burst before a buyer came in. There may still be cuts and overall restructuring from the Times, as they try to streamline and merge the site with their current offerings, but it could have been worse if investors had enough and just pulled the plug outright. Toonkel notes in the article that the real question is integrating The Athletic “without squeezing its bottom line too much.” The site currently is not profitable, and so you’d think there’s going to have to be re-jiggering to make it all work.
The ultimate irony, of course, is that Athletic founder Alex Mather once gave that famous quote how he wanted to “wait every local paper out and let them continuously bleed until we are the last ones standing.” In this case, they ended up selling to a newspaper instead, so go figure.