Spotify Buys The Ringer, Calling It 'the Next ESPN'

The Ringer's Bill Simmons is taking his talents—and his 90-person staff—to Spotify. The music streaming service today announced that it has picked up The Ringer, the sports and culture site Simmons started in 2016. Terms of the deal were not disclosed. The acquisition comes on the heels of Spotify aggressively gobbling up podcasting companies Gimlet and Anchor in the ongoing seesaw between music streaming providers, like Apple and Google. The Ringer has 30 podcasts—and boasted of podcast ad sales north of $15 million in 2018—and a “proven track record of creating distinctive cultural content as well as discovering and developing top-tier talent [that] will make them a formidable asset for Spotify,” according to a statement from Spotify’s chief content officer Dawn Ostroff. During this morning’s earnings call, Spotify CEO Daniel Ek said, “What we really did with The Ringer, I think, is we bought the next ESPN." The irony, of course, is that Simmons had a 14-year run at ESPN, which ended in, shall we say, a mess. In a 2019 interview with Adweek, Simmons pointed to how his company was picking up the ball where, perhaps, ESPN had fumbled. “We’re trying to create a multimedia site, and that’s why I bristle when people think all the revenue we make is from podcasts,” he said at the time. “It’s just not true. Our website is really successful right now, and for four straight months we’ve had our best months. From a video side, we have a ton of opportunities right now, and we’ve been exploring a lot of them. Our goal has always been to create a multimedia digital company, and after three-plus years, I feel like we’re on our way." Spotify declined to comment for this story, though at an Adweek CMO event taking place in New York City today, Spotify's global vice president of partner solutions Danielle Lee said, “We are doubling down on audio and really making a move into the podcast space. ... It's about expanding our business beyond music.” For his part, Simmons tweeted: [kickout id="1"] Industry sources are interested to see if The Ringer can leverage Spotify's user registration and data, and whether Spotify will invest in exclusive content. “It’s a good result for The Ringer,” said a buyer requesting anonymity because they were not permitted to talk to the press. “If you look at how the industry is going towards the ending of third-party cookies, publisher monetization will get harder and harder. It’s a good out for them.” John Lambros, president and managing partner at media investment bank GCA Advisors (which wasn't involved in this deal), views the acquisition through two lenses: the backdrop of the evolving streaming music marketplace, and the recent shakeups in sports media. "It’s amazing how Spotify jumped so far in front of the podcast market. They're almost like Amazon—they have a platform where they can see how these podcasts are performing," Lambros said. "They have a good set of data in knowing of what they’re getting in advance." Much more interesting, Lambros believes, is looking at the deal less from the standpoint of Spotify and more in the category of Barstool and what's happening with sports media at large. "I’d argue that this is where sports is going," he said. "How do you target the under-30 sports enthusiast today? They're at Bartstool, The Ringer, doing sports betting, doing activities that aren't watching full-length games or even shows on ESPN." Indeed, last week, Barstool took on a new investor in Penn National Gaming, a regional operator of casinos and racetracks, and just a couple months ago, The Player's Tribune, Derek Jeter's sports site, was picked up by Minute Media. "You look at Barstool and The Ringer, Dave Portnoy and Bill Simmons, these are folks staring to galvanize the sports marketplace and drive engagement," Lambros said. "Different folks are recognizing the sports landscape is changing. It’s a more interesting deal from that POV." Even with the acquisition, media buyers still don’t put The Ringer as a "must-buy," but do say it was a good deal and that they are interested to see if Spotify will try to bundle some sort of premium package between The Ringer, the website and the podcast. The Ringer’s ad sales will still come from Vox Media, which entered a deal with Simmons in 2017. Vox also hosts The Ringer’s website, and there are no immediate plans to change that. (Vox did not return requests to comment.) In that 2019 interview with Adweek, Simmons gushed about the Vox relationship, and in particular the company’s CMS, Chorus. “Their CMS is just probably the best one,” he said. “So it allows us to not have to worry about anything other than the content that we’re putting on the website, which has been pretty cool. We thought a lot about whether we wanted to spend the time to develop and engineer a real website which would have been seven figures to do correctly. And we just didn’t. We didn’t feel like it was worth it, and we didn’t feel like it was a good use of expenses, because as we’ve seen this decade things just shift too fast and we didn’t want to build a website that a year later would be completely outdated.” The Ringer staff has also been trying to unionize, and in a statement said that it "look[s] forward to continuing good-faith negotiations." [kickout id="2"] In his previous interview with Adweek, Simmons noted that "this stuff is really hard. It’s really hard to launch something, and it’s hard to keep it afloat, and then it’s hard to try to be good every day, and I have so much more respect now for anybody who goes through this process. I certainly never want to go through it again! I’m one and done with this. I can never try to do this again." The Wall Street Journal first reported the inklings of a deal in mid-January. Additional reporting by Jason Lynch and Ryan Barwick.

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