The New York Times to Acquire The Athletic for $550M

The New York Times Acquires The Athletic

The New York Times Company has reached an agreement to acquire the sports media company, The Athletic, in a transaction valued at $550 million, as reported by The Information.

This acquisition follows several months of industry discussion. Previously, Alex Mather, CEO of The Athletic, explored a potential merger with Axios, though these discussions were ultimately unsuccessful.

Expanding the Subscription Base

The New York Times is aiming to strengthen its subscription services through this purchase. The company exceeded 8 million subscribers last year and is actively working towards a target of 10 million subscribers by 2025.

The Athletic's Subscriber Numbers and Financials

Established in 2016, The Athletic currently holds 1.2 million subscribers, each paying approximately $72 annually. Despite this substantial subscriber base, The Athletic has not yet achieved profitability.

The company anticipated reaching profitability by 2023, but has incurred significant expenses. Between 2019 and 2020, The Athletic spent nearly $100 million while generating around $73 million in revenue, employing a staff of 600.

Industry Consolidation and Worker Concerns

The New York Times’ acquisition of The Athletic aligns with the current trend of consolidation within the media landscape.

Recent examples include BuzzFeed’s acquisitions of Complex and HuffPost prior to its public offering. However, these mergers often raise concerns among media professionals.

Following BuzzFeed’s acquisition of HuffPost, 47 employees were laid off from a staff of 190, and the entire HuffPost Canada division was eliminated, affecting an additional 23 employees.

Both The New York Times and The Athletic implemented staff reductions at the beginning of the pandemic, mirroring actions taken by numerous other media organizations.

The Rise of Unionization

Increasingly, media workers are seeking union representation to safeguard themselves against unexpected job losses and wage reductions, issues that have been prevalent in the industry even before the pandemic.

Some journalists have adopted a more proactive stance. In late 2019, the entire staff of Deadspin resigned in protest of management practices and subsequently founded Defector, a media company owned and operated by its employees.

During its inaugural year, Defector generated $3.2 million in revenue, covering its $3 million in operating costs.

Wirecutter Acquisition and Labor Disputes

In a smaller transaction, The New York Times acquired Wirecutter, a product review website, for $30 million in 2016.

However, tensions have arisen between Wirecutter and its parent company. After two years of protracted union contract negotiations, Wirecutter staff initiated a five-day strike, encompassing Black Friday and Cyber Monday, due to management’s failure to reach an agreement before Thanksgiving.

Subsequently, the Wirecutter Union filed an unfair labor practices complaint with the National Labor Relations Board after The New York Times withheld pay during the strike.

On December 14, a deal was reached between the union, represented by The NewsGuild of New York, and The New York Times, guaranteeing increased compensation and improved working conditions.

Despite this agreement, The New York Times continues to face criticism regarding its stance on unionization.

The Wirecutter Union expressed its support via Twitter, stating: “Hey @TheAthletic, we’d love you to meet our friend @nyguild.”