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N.Y. Times' subscription goals closer after purchasing The Athletic

N.Y. Times becomes more aggressive player in sports media with The Athletic acquisition, adding to its more general-interest sports coverageGETTY IMAGES

The N.Y. Times "reached an agreement to buy The Athletic" in an all-cash deal valued at $550M, bringing the Times "closer to its goal of having 10 million subscriptions by 2025," according to Hirsch, Draper & Rosman of the N.Y. TIMES. The Athletic has 1.2 million subscriptions, while the Times has more than 8.0 million currently. N.Y. Times President & CEO Meredith Kopit Levien said that there was "'relatively modest' overlap in subscribers of the two companies." The Athletic "will be operated separately from The Times's newsroom and its sports section." The publisher "will be David Perpich," a longtime senior exec at the Times. The Athletic was started in '16 by co-Founder & CEO Alex Mather and co-Founder & President Adam Hansmann. Both Mather and Hansmann "will stay on after the acquisition." Mather, who is currently the site's CEO, "will become general manager and co-president." Hansmann "will be its chief operating officer and co-president." The site has "about 600 employees -- roughly 400 in its newsroom." Levien said that The Athletic brought in about $65M in revenue last year, with operating losses of roughly $55M. She added that The Athletic "would eat into The Times's profitability over the next three years, before adding to the bottom line, as it adds new subscribers and more advertising revenue." The Times "will offer The Athletic as an independent subscription -- and will ultimately make it a part of a New York Times package" (N.Y. TIMES, 1/7).

EXPANDING THE SCOPE: The WALL STREET JOURNAL's Bruell & Mullin note the transaction is "expected to close in the first quarter" of this year. Acquiring The Athletic "would make the Times a much more aggressive player in sports media." Levien said that The Athletic's deep coverage of individual teams and players "will complement the Times' more general-interest sports coverage." The deal will continue the Times' efforts to "diversify its subscription offerings." In Q3, 320,000 Times subscriptions "were for its core news offering while 135,000 were for lower-cost offerings" (WALL STREET JOURNAL, 1/7).

COMEBACK KID: THE INFORMATION's Martin Peers wrote the deal "crystallizes The Times' remarkable recovery from the dark days of the 2008 financial crisis, which accelerated a dismantling of a onetime print-and-TV empire into a single newspaper." Peers: "A dozen years ago, you might have expected it would be The Times itself that would get bought and not the other way around." The company is "now on track to become a fully digital operator, holding out the hope that other traditional media firms could do the same." While some pointed to The Times' past failed acquisitions, such as the '93 purchase of The Boston Globe and the '05 acquisition of About.com, those "were done under a different management team." Given what the company has dealt with over the past dozen years, absorbing The Athletic successfully "should be doable" (THEINFORMATION.com, 1/6).

OH THE IRONY: THE RINGER's Bryan Curtis wrote The Athletic "set out to do nothing less than replace newspaper sports sections." It "didn't preside over the death of newspapers," it "became one." Curtis: "This isn't just a fun little irony." The Athletic has been "becoming more like its would-be prey for years." The Athletic "turned out to have a lot in common with the newspapers it wanted to outlive" because it "has the soul of a newspaper" (THERINGER.com, 1/6).

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