the athletic $1 – Why the New York Times is buying the Athletic
The New York Times wants more subscribers. The Athletic has a large number of subscribers, but is losing money. the athletic $1
This is a two-sentence explanation of the reason why you should care about the Times has paid $550m for the Athletic the sports news site.
Now we can dig deeper into the latest wave of mergers and acquisitions. In the past couple of months BuzzFeed purchased Complex as well as Vox Media, which owns this website, purchased Group Nine. Similar to those deals, this one is beneficial for both parties, up to a certain point. However, this Times-Athletic deal also highlights the difficulties both companies face in the present. It could be described as an ode to chocolate and peanut butter or describe it as a marriage of convenience. You can call it either. the athletic $1
The upside to the agreement for both businesses: the athletic $1
The Times, which has changed from a publication that relies on ads to an organization that is backed by paid subscribers, saw record-breaking growth in blockbusters under the Trump administration. It even prospered in the initial season that the disease was in its midst. In exchange for this The paper is able to pay $1 billion in cash as well as the price of its stock has gone up by 250 percent over the past five years -this means that it’s able for a payment of $550 million cash to purchase the Athletic the same way, according to Axios first announced. (The Information first heard of the value of the deal.) the athletic $1
In exchange the Times receives a brand new subscription product that it can sell alongside its primary product. It’s an offering that isn’t in conflict with what the Times is currently doing. The paper has mostly ignored sports overall for the past several years, and has spent little or no time focusing on the individual teams in sports that is the main reason for the Athletic. the athletic $1
The Athletic The Athletic, in turn has already signed 1 million paid subscribers, astonishing skeptics — like the man who is typing this, who thought there weren’t thousands of people who would spend money to read about their favorite teams in sports. The fact that it’s partnered with the Times ensures that the company reaps the advantages of having a larger marketing platform. It also means that the Times could offer subscription bundles that contain both of the publications. This could increase the number of Athletic customers less likely end their subscriptions when their sport or team isn’t in play — something that people who know the Athletic have told me is a challenge for the company currently.
However this is the reason why is that the Athletic is going at 550 million dollars — lower that the $750m value the company had been reportedly looking for as well as around the amount its investors believed it worth in February of 2020 when it was last able to raise money — is due to the fact that it must. the athletic $1
In the news, as the Information’s Jessica Toonkel has reported, the company burned to more than 100 million between 2019 and in 2020. In the entire year of 2020, the year that sports was dark throughout the year, the company was unable to recover $41 million from a profit in the region of $47 million. The most optimistic forecasts showed the company losing money for at least 2023.
The company was in need of investors or buyers A person who is familiar with the company told me it was Athletic was also in talks with Middle Eastern sovereign wealth funds this fall. The Times deal addresses an issue however it’s not the solution that the Athletic was seeking. We kept hearing about the Athletic searching for deals throughout this season, for instance,ike a proposed merger with Axios and to take the combined company to the public market. the athletic $1
The Times is awe-inspiringly satisfied with its growth in subscriptions during the Trump administration, that time is now over (for for the time being). The Times will need to work harder to bring in new subscribers. This was evident in the slowing growth figures during the course of last year’s. If the Times were more content with growing organically, they may not be charging around $500 per subscriber to the Athletic. the athletic $1
Instead, it’s signing the second-largest acquisition in the newspaper’s history. The Times purchased the Boston Globe in 1993 for $1.1 billion. In 2005, it spent 410 million to purchase About.com which was the biggest digital acquisition prior to this day. The deals did not work to the best advantage for Times. The newspaper was sold to it’s Globe at the end of 2013 with a price tag of $70 million and then it sold About by paying $300 million for it in 2012. (by trading it with Barry Diller’s IAC which later turned it into DotDash and now holds a large portion of the former Time Inc).
Past performance doesn’t guarantee the future, and today’s Times is a brand new group of business executives, so it’s possible that this will pan out. But don’t let it be a mystery it’s a huge bet with substantial risks and potential upsides and a bet that the Times could not be in a position to take too long ago. the athletic $1
