The New York Times acquires sports website The Athletic for 0 million

The New York Times acquires sports website The Athletic for $550 million

The New York Times Building in Manhattan, New York, US, August 3, 2020. REUTERS / Shannon Stapleton / File Photo

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(Reuters) – The New York Times said Thursday it has agreed to buy subscription-based sports website The Athletic for $550 million in cash, as the 170-year-old newspaper adds more digital content to its subscriber-grab.

Founded in 2016, The Athletic had 1.2 million subscribers as of December, and covers more than 200 clubs and teams in the United States and around the world. It was last valued at $500 million in a special increase in 2020.

“Acquiring The Athletic puts us in a position to be a world leader in sports journalism,” said Meredith Cobit Levian, CEO of The New York Times.

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The deal shows The New York Times’ push toward a subscription-first model and the increase in paid readers outside of its core news content. It has expanded digital offerings including digital cookbook NYT Cooking and product review site Wirecutter as the print industry struggles with steep declines in advertising and print readers.

The company closed the third quarter of 2021 with over 8 million paid subscriptions across its digital and print products; You have set a goal of reaching 10 million subscribers by 2025.

In a phone call with an analyst Thursday, Levine said Athletic had an operating loss of about $55 million and revenue of about $65 million in 2021.

She said there was little overlap between The New York Times and The Athletic’s subscriber base and would help the company grow ad revenue at The Athletic.

It plans to sell subscriptions to The Athletic as a standalone product initially, and gradually include it in a broader package.

“We are now aiming for a larger target of 10 million subscriptions and believe The Athletic will enable us to expand our market to potential subscribers,” added Levian.

The deal is expected to add to the newspaper’s revenue growth and reduce its operating profit for about three years.

Athletic will operate as a separate unit of the company, and its founders Alex Mather and Adam Hansmann will remain after the acquisition.

Allen & Company advised the New York Times on the deal, while The Athletic was advised by LionTree Advisors.

The information first reported about the deal on Thursday. Shares of the New York Times Company closed 4.7% higher at $47.82.

(This story corrects the fifth paragraph to mention that the New York Times ended the third quarter of 2021 with more than 8 million paid subscriptions across its digital and print products, not that it added more than 8 million paid subscriptions across its digital and print products over the past three years.)

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Additional reporting by Shafi Mehta in Bengaluru; Editing by Devika Siamnath, Shailesh Cooper and Chris Reese

Our Standards: Thomson Reuters Trust Principles.

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