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Source: N.Y. Times buys The Athletic for around $550M

The N.Y. Times has "agreed to acquire" The Athletic in a deal valued at around $550M, according to a source cited by Jessica Toonkel of THE INFORMATION. The deal is a "major acquisition" for the Times, which has set an "ambitious goal of reaching 10 million subscribers by 2025." The "big question is how the Times can integrate The Athletic without squeezing its bottom line too much." The Athletic has said it "doesn’t expect to be profitable until 2023, thanks to its hefty staff" (THEINFORMATION.com, 1/6). THE HILL's Dominick Mastrangelo noted The Athletic brought in $47M in revenue in '20 while "burning $41 million" and projected '21 revenue would jump to $77M. The Athletic "does not rely on advertising for revenue, and the company previously stated it had more than 1 million subscribers" (THEHILL.com, 1/6). BLOOMBERG NEWS' Gerry Smith notes The Athletic in November had "about 1.2 million subscribers." In June '20, the Athletic "cut 46 employees, or 8% of its staff" (BLOOMBERG NEWS, 1/6).

WHAT'S IN STORE: AWFUL ANNOUNCING's Jay Rigdon notes The Athletic’s ownership has been "raising money and considering an exit for years, and their recent shifts in strategy (especially on the audio side) felt designed to open up new streams of revenue and demonstrate that there’s growth to be had beyond the pure subscription model that had been their calling card since inception." As for the Times, it is a move that "immediately boosts their subscription base, although it remains to be seen exactly how The Athletic will be folded into their operations" (AWFULANNOUNCING.com, 1/6). THE WRAP's Lindsey Ellefson notes The Athletic has been "looking for a buyer for months." Initial talks with "not only the Times, but Axios, fell through in 2020 and in September, the company hired LionTree investment bank as it looked for funding and explored a sale at a value that was estimated could reach $750 million" (THEWRAP.com, 1/6).

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