What Axel Springer and Axios Could Gain From Each Other in an Acquisition

The German media conglomerate Axel Springer is reportedly in discussions to acquire Axios, The Information reported Friday morning, a move that could shore up gaps in the editorial offerings of both publishers. Axel Springer has taken steps to expand its reach in the U.S. in recent years, acquiring what was then Business Insider (now Insider) in 2015 and purchasing an ownership stake in Group Nine Media in 2019. A representative for Axel Springer declined to address the development, saying the publisher does not comment on "market rumors." Axios also declined to comment. However, a number of factors suggest such a merger would benefit both parties. The market is ripe for consolidation Just last month, Axios was reportedly engaged in discussions with sports publisher The Athletic regarding an acquisition, according to reporting from The Wall Street Journal. As the digital advertising industry grows more competitive, several publishers have used mergers and acquisitions as a tool for adding scale overnight, as was the case in the November pairing of BuzzFeed and HuffPost. Axios reached 19.8 million unique visitors in August, up from 7 million a year prior, according to Comscore data reported by The Journal. While it's already substantial, the publisher is likely looking to scale its audience to compete on a more even footing with its larger industry peers including The Washington Post and New York Times. Combining with Axel Springer could do just that. Insider, for example, reaches around 375 million unique monthly visitors, publisher Henry Blodget told Poynter in January. ‘Shrinkage Seems Inevitable’ in BuzzFeed and HuffPost Deal The newsletter ecosystem Unlike the BuzzFeed acquisition, which combined two similarly-sized publishers, an Axios and Axel Springer marriage would allow both parties to diversify their editorial strategies. Axel Springer brings scale to the table, while Axios could offer its armada of newsletters, a medium whose popularity and value continue to rise. The newsletter-centric publisher generated $58 million in revenue in 2020, largely thanks to its email sponsorship operation, according to The Journal. In September, Axios had 1.4 million individual newsletter subscribers and sent more than 4 million newsletters a day. This year, Axios began expanding into the local news market via its Axios Local program. It has launched in five cities so far, and general manager Ted Williams announced on Thursday that the program intends to grow into 14 more locations by the end of the year. By buying into the swelling universe of Axios newsletters, Axel Springer would gain direct access to the inboxes of readers across the United States. "Axios has proven that by investing in the email channel, you can build an audience of logged-in, engaged audiences who sit outside of the walled gardens," said Kerel Cooper, the CMO of LiveIntent. "That email audience represents a trove of first-party data, the key to identity in the new world." Such a strategy would complement Insider's October acquisition of Morning Brew, a consumer-facing business newsletter that has grown rapidly in recent months and spawned a number offshoot products. Between the two, the German publisher would become an immediate presence in the growing newsletter ecosystem. As Adweek first reported earlier this week, Axel Springer also signed a global content-sharing deal with Facebook, an agreement that opens up a new revenue stream for the German giant. With a fresh line of revenue and a hunger for consolidation, Axel Springer might have found a suitable partner in Axios. Axios’ Jim VandeHei on the Future of Media and the News Outlet’s Foray Into Local News