Some of those familiar with The Athletic’s sale to the New York Times view it as a major coup for the sports-subscription website, while others view it as a disappointment, according to a report from CNBC.
The Times recently purchased The Athletic for $550 million, offering a life raft to a website that had no advertising and a wavering subscription base. As CNBC relayed, The Athletic has never been profitable, burning through close to $100 million in the past two years combined. Per CNBC, it only managed to bring in $73 million over that same time span.
So to get $550 million from a company that is only looking to add to its subscriber base … well, The Athletic should be feeling pretty good about itself. If nothing else, the Times likely bought The Athletic one more year of existence, though The Athletic will likely undergo some changes to its business strategy. That could include reducing the editorial staff, many close to the partnership have told OutKick.
Perhaps that is why “several investors and advisors” told The Athletic co-founders Alex Mather and Adam Hansmann to hold on to the company and not sell, as CNBC reported. Basically, change isn’t often beneficial to all involved.
Anyway, along with the New York Times, Amazon, Conde Nast and DraftKings were considered companies with at least a passing interest in taking The Athletic off the desperate hands of Mather and Hansmann.
“After kicking the tires, those companies didn’t emerge as serious buyers,” CNBC wrote, citing multiple sources. “Instead, a fourth party, Private-equity firm TPG, became the Times’ biggest rival in The Athletic sweepstakes, the people said. But a buyout firm owner was not seen to be favored by website employees, whose jobs could have been threatened, two of the people said. A spokesperson at TPG declined to comment.”
But again, a Times takeover doesn’t necessarily mean The Athletic employees are safe. While the Times intends to continue The Athletic’s regionalized sites, it could do so on a much smaller scale, employing just several national writers and no more than three writers and an editor in each city, source said.
Several high-profile writers told OutKick they feared for their jobs when news of the sale broke.
That said, the Times has not yet settled on an editorial strategy for The Athletic as it focuses on the business side of things for the time being, sources said.
“Some observers close to the company view the sale as a clear success, one of the most lucrative exits in the history of digital media,” CNBC reported. “… Others, though, see it differently. Several investors told Mather and Hansmann, according to sources, that The Athletic could have realized a much bigger vision. They felt that it had the promise of being a multibillion-dollar company.”
Either way, what happens to The Athletic next will be a fascinating story to follow.