After months of discussions with private equity firms, gambling operators and legacy media brands, The Athletic is being acquired by The New York Times Co., according to a report from The Information.
The move should bolster the online business of The New York Times Co., owner of one of the country’s most popular newspapers, which has been open about its goals to grow its digital subscription business. The Times has agreed to pay $550 million, the report says.
The Athletic raised money at a $475 million valuation on January 2020, but was recently seeking an acquisition in the $750 million range, according to prior reporting from The Information.
Representatives for The Athletic, The New York Times Co., and LionTree, which was hired to handle the talks for The Athletic, didn’t immediately respond to requests for comment.
The Athletic was founded in 2016 as a new model for local sports news—a subscription platform with no ads, which would hire beat writers to cover teams and leagues across the U.S. At the time, its founders made bold claims about what the group’s growth would mean for the legacy media model, particularly for newspaper sports sections across the U.S. “We will wait every local paper out and let them continuously bleed until we are the last ones standing,” Alex Mather told The New York Times in 2017.
The company has experienced large growth and raised a lot of money—it has roughly 1.2 million paid subscribers, and has raised more than $139 million. But that’s also cast doubt about the group’s long-term financial stability, and whether it can eventually turn profitable under its current model.
Meredith Kopit Levien, who took over as CEO of The New York Times Co. last September, publicly set a goal to reach 10 million digital subscribers by 2025 (it had 6.9 million in the first quarter of 2021) and adding The Athletic could be a large boost towards that target. The sports service could fit into the newspaper’s portfolio among other distinct verticals, such as the crossword products or the cooking content.
Acquiring The Athletic also means a massive influx of staffers. The group has more than 400 full-time editorial employees, a total that is about a quarter of The New York Times’ roughly 1,700 journalists globally.
The New York Times and The Athletic were in advanced acquisition talks this summer, according to The Information. Those talks ended after the two sides failed to come to terms on price, and how The Athletic employees with equity (a long list) would be compensated for that ownership. The group also reportedly had talks with a number of other groups, including Axios Media, Vox Media and FanDuel.