“Over the last 18 months, it’s been a great time to be a seller of two things: companies and talent“
by Mark Stenberg (AdAge) / Thursday, January 6, 2022
After more than nine months of shopping, The Athletic has secured a buyer for its subscription-based sports media operation, agreeing to an acquisition by The New York Times Thursday morning for $550 million, according to The Information.
The deal follows on the heels of a number of major consolidations in the media ecosystem, but it notably joins two subscription powerhouses under one banner and transforms The Times, at least on paper, into an immediate contender in the arena of national sports coverage.
Below are five takeaways from the deal.
Following its track record, The Times will likely allow subscribers to pay a smaller price exclusively for access to its sports coverage, said CEO and principal of Prohaska Consulting Matt Prohaska, who built The Times’ data-driven sales practice in 2013. Its ability to offer content bundles based on reader interest increases the value of a subscription to The Times, Prohaska said.
“The Times has been a leader for a while in how to create hybrid subscription solutions and hybrid monetization models,” Prohaska said. “They’re certainly going to have it as a standalone, but they will also bundle it with other things as part of a smart upsell.”
The ubiquity of capital and growing asymmetry in the news ecosystem have led to a rash of eye-popping media acquisitions in recent months: Dotdash paid $2.7 billion for Meredith in October and Axel Springer paid north of $1 billion for Politico in November.
For media companies like The Athletic, the froth of the market added extra incentive to look for a buyer while the money was flowing, Prohaska told Adweek.
“Over the last 18 months, it’s been a great time to be a seller of two things: companies and talent,” he said.
The Times’ acquisition raises the ceiling for its potential reach and revenue, but the integration could prove challenging, Prohaska said.
“As Peter Drucker said, ‘Culture eats strategy for breakfast,’” Prohaska told Adweek. “The devil here will be in the details.”