New York Times to buy online sports website The Athletic for $550 million - The Information
By Arghyadeep on Jan 07, 2022 | 05:37 AM IST
• NYT expects to reach 10 million subscribers by 2025
• The Athletic expects its 2021 revenue to be around $77 million and cash burn of $35 million
The New York Times Co has agreed to buy a subscription-based sports news website, The Athletic, for around $550 million, The Information reported on Thursday citing a person familiar with the matter.
The deal will help expand the 170-year-old news publisher’s digital offerings, which moved to a subscription-first business model that allowed it to weather steep declines in advertising and print readership.
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As of September 30, NYT has 8.3 million digital and print subscribers and expects to reach 10 million subscribers by 2025.
Shares of the news publisher jumped over 5.5% to $48.27 in New York trading session.
Athletic financials
The Athletic has a subscriber base who pays $72 a year for following sports news.
The online news publisher is currently looking for ways to grow advertising revenue and recently launched a free daily newsletter. Last year, the company told investors it expected its ad sales to reach $31 million in 2023.
The Athletic generated a revenue of $47 million in 2020 while burning $41 million, The Information reported and forced to lay off staff during the early months of the pandemic when most live sporting events were suspended. In September 2020, it hit 1 million subscribers.
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Earlier, the company forecasted its 2021 revenue to jump to $77 million and cash burn to drop to $35 million.
The Athletic raised $145 million in 2020 at a valuation of $530 million, according to PitchBook.
Digital media space consolidation
The acquisition news comes at a time when the digital media space is going through a consolidation.
In early December, BuzzFeed went public via a SPAC merger and bought Complex Media for $300 million. Vox Media, the parent company of New York Magazine and The Verge, inked a deal to buy Group Nine Media.
German publishing giant Axel Springer in August acquired the U.S. political news organization Politico for around $1 billion.
Picture credit: Poynter