The New York Times Company (NYSE:NYT) said on Thursday it has agreed to buy subscription-based sports website The Athletic for $550 million in cash, as the 170-year-old newspaper wants to add more digital content to attract users to subscribe.
Founded in 2016, The Athletic had 1.2 million subscribers as of December and writes about more than 200 clubs and teams in the US and around the world. It was most recently valued at $500 million in a private funding round in 2020.
“Acquiring The Athletic puts us in a global leadership position in sports journalism,” said New York Times CEO Meredith Kopit Levien.
The deal represents the New York Times' push towards a subscription model and increased paid readership outside of its core news content. It has been expanding its digital offerings to include the NYT Cooking digital cookbook and product review site Wirecutter as the print industry grapples with a sharp drop in ad readership. reports and newspapers.
The company ended Q3 2021 with over 8 million paid subscriptions across its print and digital products; they have set a goal of reaching 10 million subscribers by 2025.
Mr. Levien said Athletic has an operating loss of about $55 million on total revenue of about $65 million in 2021.
She said there is a slight overlap between the New York Times and The Athletic's subscriber base and that the company will help grow ad revenue at The Athletic.
They plan to sell the subscription to The Athletic as a standalone product at first, and gradually include it in a broader package.
“We are currently pursuing a meaningful goal of over 10 million signups and believe The Athletic will allow us to expand our market of potential subscribers,” added Mr. Levien.
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