The New York Times Company (NYSE: NYT) announced today that it has entered into an agreement to acquire The Athletic, the global digital subscription-based sports media business that provides national and local coverage of more than 200 clubs and teams in the U.S. and around the world, for an all cash purchase price of $550 million, subject to customary closing adjustments. The transaction is expected to close in the first quarter of 2022.
Meredith Kopit Levien, president and chief executive officer of The New York Times Company, said, “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. 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 Times has been rapidly growing its consumer subscription business, doubling to over 8 million paid subscriptions across digital and print products in the last three years.
Ms. Levien added, “Strategically, we believe this acquisition will accelerate our ability to scale and deepen subscriber relationships. We are now in pursuit of a goal meaningfully larger than 10 million subscriptions and believe The Athletic will enable us to expand our addressable market of potential subscribers. Alongside our core news report, New York Times Cooking, New York Times Games, Wirecutter and Audm, we’ll have a more robust offering to engage the millions of subscribers we already have and convert many more new ones among our 100 million-plus registered users. Ultimately, The Athletic helps further our vision of making The New York Times the essential subscription for every person seeking to understand and engage with the world.”
The Athletic is currently expected to be immediately accretive to The New York Times Company’s revenue growth rate. The Times Company expects the acquisition will be dilutive to The New York Times Company’s operating profit for approximately three years, as it scales subscriptions and builds an advertising business, and accretive thereafter.
The Athletic was founded in January 2016 by Alex Mather and Adam Hansmann, with the goal of providing smarter sports coverage for devoted fans through a subscription model. As of December 2021, the site had grown to 1.2 million subscribers.
Prior to founding The Athletic, Mr. Mather and Mr. Hansmann worked together at Strava, the fitness tracking app. They will stay on after the acquisition, Mr. Mather as The Athletic’s general manager and co-president and Mr. Hansmann as its chief operating officer and co-president. The Athletic will be a subsidiary of The Times Company and continue to operate separately. Mr. Mather and Mr. Hansmann will report to Times Company executive David Perpich. Mr. Perpich will be stepping into a new role as publisher of The Athletic. He has a long track record at The Times in helping scale subscription businesses, having played key leadership roles in the initial core product paywall, the creation and scaling of the Cooking and Games products, and the growth of Wirecutter once acquired by The New York Times Company.
Mr. Mather and Mr. Hansmann said, “We started The Athletic to bring fans closer to the teams, players and leagues they love through deep, immersive journalism and storytelling. 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.”
Allen & Company LLC acted as financial adviser and Morgan, Lewis & Bockius LLP acted as legal adviser to The New York Times Company. LionTree Advisors LLC acted as financial adviser and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP acted as legal adviser to The Athletic.