The New York Times Co.’s decision to reportedly acquire The Athletic in a deal valued at roughly $550 million finally puts to an end the wild deal-seeking rollercoaster ride the subscription-focused sports publisher took part in throughout 2021.
News of The Athletic first entering M&A talks broke in March, when the WSJ reported that the sports site was discussing a merger with Axios. The WSJ then in early May reported that The Athletic had halted talks with Axios and instead viewed the NYT as an ideal M&A partner.
The NYT was then reportedly in talks to buy The Athletic but apparently wasn’t as of June due to disagreements over sale price. Nearly a month after that report, Front Office Sports and Puck separately reported that the New York Times was back to being interested in The Athletic.
So at one point M&A news related to The Athletic in 2021 felt like “Knives Out 2” cast announcements: endless and less meaningful each time.
But the way The Athletic did end its M&A journey speaks to what its co-founders Alex Mather and Adam Hansmann hope to eventually grow their subscription sports site into.
For example, the fact that The Athletic pursued a deal with the NYT, a large legacy publisher with a robust subscriber base, rather than an advertising-focused digital publisher like Axios, suggests how Mather and Hansmann view fast-tracking paid sub growth as one of their main goals.
Additionally, The Athletic pursing a deal with the NYT over one with a sports betting operator like DraftKings (which at one point was reportedly interested in The Athletic) suggests that the sports publisher was focused on finding a M&A partner that could boost the growth of its editorial products like its podcasts in the long-term. And a massive publisher like the Times is more suited for that task than a sports gambling operator that lacks the same established reader and listener base.
For example, The Athletic had over 115 shows as of late November that in total received 10 million downloads a month. Meanwhile, the NYT had nine active shows that received over 92 million downloads in November. The Times could easily shout out some of The Athletic’s podcasts on its own big audio shows to boost its new acquiree’s monthly download total.
Of course, an M&A deal was not totally up to The Athletic. Any deal is a two-way street and The Athletic’s founders had to be careful in not pursuing dead-end deals that came at the expense of other potential acquirers losing interest.
But the previous news of The Athletic halting talks with Axios and speaking with sports betting firms suggests its decision to tie-up with the NYT was at least partially a matter of choice, rather than one being made entirely out of desperation for survival.
Meanwhile, the deal closing signals what value the New York Times places on The Athletic’s 1.2 million subscribers. After all, the NYT in February ambitiously said it believed that it could eventually reach 15 to 30 million subscribers over time. The legacy publisher had 8.3 million subscribers as of Q3, a figure well on its way to reaching the NYT’s original goal (stated in February 2019) of hitting 10 million subscribers by 2025.
It’s not hard to see a future where the NYT begins to offer a bundle that includes access to The Athletic and the Times for one flat fee.