5 Takeaways From The New York Times’ Acquisition of The Athletic

After more than nine months of shopping, The Athletic has secured a buyer for its subscription-based sports media operation, agreeing to an acquisition by The New York Times Thursday morning for $550 million, according to The Information. The deal follows on the heels of a number of major consolidations in the media ecosystem, but it notably joins two subscription powerhouses under one banner and transforms The Times, at least on paper, into an immediate contender in the arena of national sports coverage. Below are five takeaways from the deal. The Times adds another non-news subscription offering As attention to hard news nationwide plummets, The Times is adding yet another non-news subscription offering to its growing portfolio of lifestyle services. Alongside Cooking, Games and Wirecutter, The Athletic will help the publisher attract subscribers who are uninterested in traditional news. Subscription-oriented publishers without a rich variety of content offerings, like The Washington Post, have struggled to add new digital subscribers over the last year. The Times’ acquisition of The Athletic will further insulate it from that issue. Following its track record, The Times will likely allow subscribers to pay a smaller price exclusively for access to its sports coverage, said CEO and principal of Prohaska Consulting Matt Prohaska, who built The Times’ data-driven sales practice in 2013. Its ability to offer content bundles based on reader interest increases the value of a subscription to The Times, Prohaska said. “The Times has been a leader for a while in how to create hybrid subscription solutions and hybrid monetization models,” Prohaska said. “They’re certainly going to have it as a standalone, but they will also bundle it with other things as part of a smart upsell.” The deal puts 10 million digital subs well within reach The New York Times declared its intent to reach 10 million digital-only subs by 2025, and this deal accelerates its progress toward that goal. The publisher has 7.6 million digital-only subscriptions, and The Athletic has 1.2 million. No doubt some subscribers are duplicates, but the acquisition will still move The Times forward considerably. The new value folded into its subscription could also entice on-the-fence readers into subscribing and boost retention efforts. Cooking and Games both surpassed 1 million digital subscribers this year, meaning The Times’ digital subscriber base is now not only several multiples larger than its competition, but also more diversified. The combined publication threatens local sports coverage The Athletic built its business by luring top sports reporters away from local markets with highly competitive salaries, and now that talent is headed to The Times. With a sports reporting base peppered across the country, The Times is now in direct competition with local publishers for the attention of sports fans. Local media has lagged behind its national competition in technical sophistication, but it has benefitted from the fact that local sports reporting is difficult to do from a distance. The Athletic showed the vulnerability of that buffer, and now The Times, with its vast wealth of resources and distribution channels, could threaten it further. It’s a great time to sell a media company The ubiquity of capital and growing asymmetry in the news ecosystem have led to a rash of eye-popping media acquisitions in recent months: Dotdash paid $2.7 billion for Meredith in October and Axel Springer paid north of $1 billion for Politico in November. For media companies like The Athletic, the froth of the market added extra incentive to look for a buyer while the money was flowing, Prohaska told Adweek. “Over the last 18 months, it’s been a great time to be a seller of two things: companies and talent,” he said. All eyes are on integration The Times has a checkered history when it comes to big-budget acquisitions, including its faux pas with The Boston Globe in 1993 and About.com in 2005. And recent history has shown the challenges of acquiring sports media operations in particular: In 2019, Deadspin journalists revolted under new leadership and Sports Illustrated suffered a bloodletting when it was acquired. The Times’ acquisition raises the ceiling for its potential reach and revenue, but the integration could prove challenging, Prohaska said. “As Peter Drucker said, ‘Culture eats strategy for breakfast,’” Prohaska told Adweek. “The devil here will be in the details.” Live Sports Don’t Just Keep Linear TV Afloat—They Boost Streaming, Too