The New York Times Company has entered into an agreement to buy The Athletic, the online sports news store with 1.2 million subscriptions, in a cash agreement worth 550 million dollars, The Times said on Thursday.
The Athletic was started in Chicago in 2016 by two media entrepreneurs, Alex Mather and Adam Hansmann, and was made for hard-core fans who did not find the depth coverage they wanted at a time when newspapers were in decline, Sports Illustrated was sold and ESPN began to lay off journalists.
The Athletic hired prominent sports journalists from across the country, providing coverage of games and the latest sports developments to readers who had become accustomed to getting their news online. It had a reporter who covered almost every major professional sports team in North America, as well as several top European football clubs, while serving magazine articles and podcasts.
The site now has around 600 employees – about 400 of them in the newsroom, making it the second largest employer for sports reporters in the country, behind Disney-owned ESPN. Like a number of digital media companies that have found success in recent years, The Athletic relies on subscribers, rather than advertisers, as its main source of revenue. A significant inflow of cash came in January 2020, when The Athletic raised $ 50 million from a number of investors.
Recently, as rapid subscription growth began to slow, The Athletic has explored various options, including selling a minority or majority stake in the company, with private equity firms and companies as potential buyers.
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The deal is expected to end in the first quarter of 2022. The Athletic will operate as a separate subsidiary of The Times, according to the statement announcing the deal, and the founders, Mr. Mather and Mr. Hansmann, will report to David Perpich, a Times leader who will take over the new title as publisher of The Athletic.
The deal will bring hundreds of additional sports reporters to The Times’ current staff of around 40 sports journalists. Their extra expertise can do more to attract readers who may not have been inclined to become subscribers.
For The Times, the addition of The Athletic will also mean a supply of paying readers. Meredith Kopit Levien, the company’s CEO, has consistently emphasized the importance of adding digital subscribers since he took responsibility for the newspaper’s operations in 2020. By the end of the third quarter of 2021, the newspaper had reached 8.4 million total subscriptions.
“We are now looking for a target that is significantly larger than 10 million subscriptions and believe that The Athletic will enable us to expand our addressable market of potential subscribers,” Levien said in the release on Thursday.
The newspaper’s growth has included acquisitions. In 2016, Times Company bought the product recommendation site The Wirecutter and its sibling site, The Sweethome, for more than $ 30 million. In 2020, The Times bought Serial Productions, the company behind the “Serial” podcast, for more than $ 25 million.
Mr. Mather, The Athletics’ CEO, and Mr. Hansmann, its president, met while working for the training app Strava. When they launched their website, they said much of the nation’s sports coverage was “empty calories” produced by slowly dying newspapers, adding that a media company focused on journalism for sports fans would be better for readers.
Early on, Mr. Mather boasted in an interview with The Times that The Athletics’ goal was to let local newspapers “continuously bleed until we are the last to stand.”
Katie Robertson contributed with reporting.