The New York Times announced Thursday that the company has reached an agreement to purchase the Athletic, the subscription-based sports journalism start-up, in an all-cash deal valued at $550 million. The sides reportedly had been in talks for months about an acquisition.
“Acquiring The Athletic puts us in a position to be a global leader in sports journalism and offer English speakers around the world another reason to turn to the Times Company to meet their daily news and life needs,” Meredith Kopit Levien, president and chief executive officer of the New York Times Co., said in a statement. “The Times already provides distinctive sports coverage for a general interest audience as part of our core report. As a stand-alone product, The Athletic will enable us to offer much more — extensive coverage for fans who seek a deep connection to and understanding of their favorite teams, leagues and players. With one of the largest dedicated teams of reporters covering sports globally and a commitment to everyday reporting, The Athletic is a great complement to The Times.”
The Athletic’s co-founders, Alex Mather and Adam Hansmann, will stay with the company, the statement said, with the Athletic becoming a subsidiary of the Times and continuing to operate separately. Mather and Hansmann will report to Times Co. executive David Perpich, who will become the Athletic’s publisher.
The Athletic launched in 2016, promising wall-to-wall coverage and analysis of North American sports to its subscribers, who initially paid $10 per month or $60 per year for access to all of its advertisement-free reporting. To accomplish its goals, the company poached respected sportswriters from other publications and hired others who had been laid off from previous jobs in the industry, offering them attractive salaries.
It was seen as an audacious endeavor, fueled by Silicon Valley hubris. In 2017, Mather promised to “wait every local paper out and let them continuously bleed. We will suck them dry of their best talent at every moment.” Ironically, he made that comment to the New York Times, and he later apologized.
To cover its costs, which went well beyond the money generated from subscriptions, the Athletic raised somewhere around $140 million in venture capital funding, but it never became profitable. And when the coronavirus pandemic put the sports world on pause in March 2020, the Athletic’s fortunes plummeted along with its subscription numbers. In June of that year, it laid off 46 employees, or around 10 percent of its workforce, and implemented salary cuts: 10 percent for those making $150,000 or less, with steeper cuts for those making more.
“[As] the pandemic has set in and as the sports calendar has remained frozen in place … tough decisions are necessary to guarantee our long-term viability through a period of slower growth and overall uncertainty,” Mather told the staff in an email announcing the cutbacks.
Three months after those cuts, the Athletic announced it had reached 1 million subscribers and set its sights on expanding globally (it already had established a presence covering soccer’s English Premier League) and growing its podcast network, where it did sell advertisements.
“We started The Athletic to bring fans closer to the teams, players and leagues they love through deep, immersive journalism and storytelling,” Mather and Hansmann said in the New York Times statement on Thursday. “Today marks a thrilling milestone for that dream, one realized because of the hard work of every single one of our employees. We are proud to have The Athletic become part of The Times Company’s family of subscription products. When we founded the company, we hoped to become the sports page for every city in the world. We’re excited to continue serving our avid subscribers as we grow and scale with the help of the most important journalistic organization and the leader in digital subscription news.”
The Athletic reportedly spent much of 2021 trying to market itself to potential buyers such as Axios and the New York Times. Adding the Athletic’s million-plus subscribers will further the Times’s goal of reaching 10 million paid digital-only subscribers by 2025. (As of November, it said it had 8.4 million subscribers, 7.6 million of them digital-only.) In recent years, the Times has purchased a number of other smaller media outlets, including Wirecutter and the production company behind the podcast “Serial.”