The New York Times Company agreed to purchase sports media outlet The Athletic in a deal valued at $550 million, The Information reports.
This deal comes after months of speculation -- at one point, The Athletic CEO Alex Mather approached Axios about a merger, which did not come to fruition. With this deal, the company seeks to bolster its subscription business -- The New York Times surpassed 8 million subscriptions last year and is on track to surpass its goal to grow to 10 million subscribers by 2025.
Founded in 2016, The Athletic had 1.2 million subscribers as of November, who pay about $72 per year. But on its own, The Athletic isn't yet profitable, and didn't plan to be until 2023 -- it employs 600 staff and spent almost $100 million between 2019 and 2020, though it only brought in around $73 million in the same time period.
With $550M the NYT could have just subsribed to The Athletic for 46 million years.
— Winging It In Motown (@wingingitmotown) January 6, 2022
The New York Times' acquisition of The Athletic is consistent with recent trends in media, where many outlets are experiencing consolidation. Recently, BuzzFeed acquired Complex and HuffPost before going public, for example. But media workers are skeptical of these changing tides -- after BuzzFeed acquired HuffPost, for example, it laid off 47 of 190 HuffPost employees and closed the entire HuffPost Canada arm, impacting 23 more employees. At the onset of the pandemic, both The New York Times and The Athletic laid off employees as well, as did many media companies.
More media workers are seeking union agreements to protect them from sudden layoffs and paycuts, which were a constant threat in the industry even before the onset of the pandemic. Some journalists have taken an even more radical approach -- in late 2019, Deadspin's entire staff quit the site due to frustrations with management and started Defector, a worker-owned media company. In its first year, Defector earned $3.2 million in revenue, which accounted for its $3 million in operating expenses.
In a much smaller deal than its acquisition of The Athletic, The New York Times purchased Wirecutter, a product reviews site, for $30 million in 2016. But there has been significant tension between Wirecutter and its parent company in recent months -- after two years of slow-paced union contract negotiations, Wirecutter staff went on strike for five consecutive days, including Black Friday and Cyber Monday, after management failed to reach an agreement with them before Thanksgiving. Then, the Wirecutter Union filed an unfair labor practices complaint with the National Labor Relations Board after The New York Times withheld their pay while on strike. By December 14, the union, represented by The NewsGuild of New York, reached a deal with The New York Times, ensuring increased pay and improved working conditions. But The New York Times is still facing scrutiny for anti-union behavior.
There's no word yet on how subscriptions to The Athletic will change, or how staff at the publication will be impacted by the acquisition.