New York Times To Purchase Sports Site ‘The Athletic’ In $550M Deal

The New York Times has reached an agreement to buy the subscription sports site The Athletic in a $550 million deal, the technology online news publication The Information revealed in an article on Thursday.

Citing an anonymous source familiar with the matter, The Information reported that The New York Times is pursuing the acquisition to help meet its ambitious goal of 10 million subscribers by 2025.

The Athletic was one of the first news organizations to require a subscription service to access its content when it launched in 2016. However, the founders of The Athletic, Alex Mather and Adam Hansmann, former coworkers at the fitness company Strava, saw a problem with the news industry and looked to do something about it.

“We saw media outlets continuously downsizing because they depend on an antiquated ad-based business model that is unsustainable, leaving world-class talent by the wayside,” the founders wrote in 2018. “We pay our writers well and rely on subscriptions, not ad revenue, to support our business. And we’ve said goodbye to clickbait, allowing the nation’s best sports writers to focus on producing high-quality, substantive coverage for The Athletic, without the pressure of generating ‘clicks.’ ”

It is a conversation that has plagued the news media for decades and continues to do so. However, many major news outlets have transitioned to The Athletic’s model in recent years, some relying partially on revenue and subscription services, or allowing limited free access to articles on the sites.

“The Athletic has become a force in sports journalism in less than three years,” CNBC’s Alex Sherman wrote in 2018.

Originally running out of Chicago, The Athletic has since expanded from a startup to covering many major sports, franchises and teams with a rapid expansion to 47 areas of local coverage in North America in 2018, including the beginning of international coverage in the U.K.

The site covers news in English and Montreal-French and is owned by The Athletic Media Company, headquartered in San Francisco. There was no immediate word on when the sale to The New York Times would take place.

Previously, the sports news site was in discussions with Axios over a deal after struggling into the pandemic, but ultimately those discussions ended. Vox Media and sports betting sites Draft Kings and Flutter Media were also in discussions to buy The Athletic, but those talks went nowhere.

After initially declining to buy out the company, The New York Times has now agreed to buy The Athletic for that $550 million, close to the figure it was valued at, though the company reportedly sought $750 million.

The deal gives The New York Times a leg up in its goal to reach 10 million subscribers by 2025. As of Nov. 3, 2021, the site has 8.4 million subscribers to their digital and print platforms, 7.6 million of which are digital. According to Bloomberg, the Athletic had 1.2 million subscribers as of November 2021.

The New York Times has also achieved this goal by buying media services like Audmn, a subscription-based audio app, and Serial Productions, a podcast production company, in 2020.

According to the article, The Athletic brought in $47 million in revenue in 2020 and laid off a significant portion of its staff and cut pay for the rest during the early months of the pandemic, which caused a months-long pause in live sports events. In the fall of 2021, the company projected revenue of $77 million and a cash burn of $35 million.