According to the President and CEO of the New York Times Company, Meredith Kopit Levien, the 170-year old publication has a goal of amassing more than 10 million subscribers to their outlet and believes this deal will help them get closer to that goal.
The New York Times wants to be more ‘Athletic’
By Mo Hussain, Contributor
The New York Times is adamant about being among the top media companies in the world as they’ve recently made quite a hefty purchase. Last week, The New York Times acquired The Athletic, a sports media outlet with around 1.2 million subscribers. The acquisition was an all-cash deal for $550 million. According to the President and CEO of the New York Times Company, Meredith Kopit Levien, the 170-year old publication has a goal of amassing more than 10 million subscribers to their outlet and believes this deal will help them get closer to that goal.
“Strategically, we believe this acquisition will accelerate our ability to scale and deepen subscriber relationships,” Levien said in a press release.
On the surface, this deal addresses basic economic goals for both parties. The New York Times wants subscribers, and The Athletic needs money. The Athletic has been operating at a loss for the last three years. This is in large part due to hiring lots of talent. The company lost a combined $95 million in 2019 and 2020. In 2021, the company saw a 64 percent increase in revenues but was still on pace to report a $35 million loss. Although the company was supposedly set to make a profit in 2023, that’s still a long way away.
The company’s financial situation is likely the reason why investors didn’t seem to be receptive to the deal. The New York Times stock price dropped by over 11 percent, 48 hours after the deal was announced. The New York Times expects that The Athletic’s financial situation will be “dilutive to The New York Times Company’s operating profit for approximately three years.”
An area that traditional media companies (like The New York Times) continue to battle for is digital attention. As the internet has grown in popularity, it’s been an uphill battle for traditional media to deal with the open playing field the internet provides for information. However, one of the main traditional media properties that have stayed relevant throughout the years is sports. Forty-three of the top 50 television broadcasts in 2021 were all sports-related programming.
Sports continue to be a pillar in our society’s culture, and it looks like The New York Times looks to capitalize on that market with this purchase.
