the new York Times reported Thursday that the company is buying the athletic, subscription-based sports-journalistic start-up, which is worth about $550 million.
The two sides were reportedly in talks for months over a takeover.
Athletic launched in January 2016, promising its customers wall-to-wall coverage and analysis of North American sports teams, which initially paid $10 per month or $60 per year for access to all of its ad-free reporting. paid. To accomplish its goals, the company hunted down respected players from other publications and hired others who were laid off from their previous jobs in the industry, offering them lucrative salaries.
It was seen as an audacious effort, fueled by Silicon Valley pride. In October 2017, co-founder Alex Mather promised to “wait for every local paper and let them continue to bleed. We will show them the best of their talent every moment.” Ironically, he made this comment in an interview with The New York Times, the publication to which Mather and his associates would sell their company (he later apologized for the comment).
To cover its costs, which far outweighed the money generated from subscriptions, Athletic raised about $140 million in venture capital funding, yet it never turned profitable. And when the coronavirus pandemic brought the sporting world to a halt in March 2020, Athletic’s fortunes plummeted along with its membership numbers. In June of that year, it laid off 46 employees, or about 10 percent of its workforce, and implemented a pay cut: 10 percent for those earning $150,000 or less, with harsher cuts for those making more.
,[As] The pandemic has begun and as the sporting calendar remains stagnant … difficult decisions are necessary to guarantee our long-term viability through a period of slow growth and overall uncertainty,” Mather told staff in an email.
Three months after those cuts, Athletic announced that it had reached 1 million subscribers and set its sights on expanding globally (it had already made an appearance in England to cover Premier League Soccer). has established) and growing its podcast network, where it sold ads.
“Our investors have been and continue to be incredibly patient,” Mather told CNBC in September 2020. We just don’t think about exiting, and we don’t know the upside here. There are very few companies that we’re doing. The New York Times is the tip of the spear, and they’re growing faster than ever. We don’t know what our roof is. When we think we know what our roof is, it’s between Adam and me It’s time to talk. But we haven’t come close to having a chat.”
Nonetheless, this year’s news has mostly been about the Athletic’s efforts to market itself to potential buyers, such as the Axios and The New York Times. Adding Athletic’s more than a million subscribers would further the Times’ goal of reaching 10 million paid digital-only customers by 2025 (as of November, it said it had 8.4 million subscribers, of which 7.6 million were digital-only). ). In recent years, the Times has purchased several other smaller media companies, including Wirecutter and the production company behind the podcast “Serial”.
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