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The New York Times Will Buy The Athletic for $550M, Expanding Sports Coverage and Subscriptions

The New York Times Will Buy The Athletic for $550M, Expanding Sports Coverage and Subscriptions
Written by publishing team

The New York Times Company (NYSE: NYT) will buy sports media company The Athletic for $550 million in cash in a deal that will help expand sports coverage and subscription offerings for the New York Times.

According to the press release, The Athletic was founded in 2016 and is “a global digital subscription-based sports media company that provides national and local coverage of more than 200 clubs and teams in the United States and around the world.” It is reported that as of December 2021, The Athletic has 1.2 million subscribers.

The New York Times is growing its subscription business, which has doubled to more than eight million paid subscribers across digital and print channels in the past three years, according to the filing. The acquisition is supposed to help increase New York Times subscriptions.

“Acquiring The Athletic puts us in a position to be a world leader in sports journalism and gives English speakers around the world another reason to turn to The Times Company for their everyday news and life needs,” said Meredith Cobit Levian, President and CEO of The Times Company. The New York Times in a press release. “As an independent producer, The Athletic will enable us to provide more comprehensive coverage for fans seeking to deeply connect and understand their favorite teams, leagues and players. … Strategically, we believe this acquisition will accelerate our ability to broaden and deepen our subscriber relationships.”

The deal, announced January 6, is expected to immediately accrue with the New York Times’ revenue growth rate. However, the deal will reduce the New York Times’ operating profit as it expands subscriptions and work on its advertising business, but it will increase thereafter, according to the filing. The compensation cap was set at $2.75 million, equal to 0.5% of the transaction value.

The founders of The Athletic will remain after the acquisition. Alex Mather will be General Manager and Co-Chairman of Athletic, and Adam Hansmann will be COO and Co-Chair of Athletic; They will report to David Berbic, CEO of Times, who will become publisher of The Athletic Magazine. As stated in the representations, The Athletic will be a subsidiary of The Times Company and will operate separately.

“We started The Athletic to bring audiences closer to the teams, players and leagues they love through deep journalism and storytelling,” Mather & Hansmann said. “Today marks an exciting milestone for that dream… We are proud to have The Athletic become part of the Times Company family of subscription products. When Founding the company, we hoped it would become the sports page of every city in the world. We are excited to continue serving our avid subscribers as we grow and expand with the help of the most important journalistic organization and leader in digital subscription news.”

The transaction is expected to close in the first quarter of 2022, pending usual closing terms.

Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP as legal counsel and LionTree Advisors LLC as financial advisor to The Atlantic. Morgan, Lewis & Bockius LLP serves as legal counsel for The New York Times and its financial advisor Allen & Co.

This acquisition follows New York Times efforts to expand into different areas and diversify its content, while also working on branding, design and other media for storytelling. Previous deals include its acquisition of The Wirecutter and The Sweethome in October 2016, which were combined in 2017 under the Wirecutter brand. In 2016, the publisher also acquired design agency Fake Love and marketing agency HelloSociety. Moreover, in July 2020, The Times acquired Serial Productions, which produces the podcast “Serial” and entered into an alliance with “This American Life”.

Prior to the announcement, The New York Times stock was valued at $45.68 on January 5th. When the deal was announced on January 6, shares closed at $47.82. A few days later, on January 10, the shares closed at $42.50.

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