New York Times To Buy The Athletic For $550M: Report

The New York Times Co. NYT is acquiring the sports site The Athletic for approximately $550 million.

What Happened: According to a report in The Information sourced from an unnamed “person familiar with the situation,” the acquisition feeds into the Times’ goal of reaching 10 million subscribers by 2025. As of the end of the third quarter, the publishing company had 8.3 million digital and print subscribers.

The Athletic’s readership is mostly subscription-driven, with most readers paying $72 a year, although it recently launched a free daily newsletter. The site hit a rough patch during the early months of the COVID-19 pandemic when sporting events were suspended — members of its workforce were either furloughed or forced to take salary cuts — but by September 2020 it began to rebound and hit the 1 million-subscriber level.

See Also: The Athletic's Model For Local Sports Writing: If You Build It, Will They Buy It?

What Happens Next: The Athletic has been trying to stay ahead of financial challenges since the pandemic began. The company has never been profitable since its launch in 2016 and doesn’t predict to be in the black until 2023.

At the start of 2020, The Athletic raised $145 million at a valuation of $530 million, but the pandemic created problems when live sporting events were suspended during the early months of the health crisis. The company generated $47 million in revenue that year but recorded $41 million in operating costs.

Furthermore, The Athletic has been conspicuously eager to hook up with a publishing company with greater financial stability. In March, it was in discussions with Axios over a potential merger that included plans to go public via a special purpose acquisition company, but those talks came to naught. Last fall, The Athletic hired boutique investment bank LionTree to facilitate a possible sale.

NYT Price Action: At publication Thursday, shares of the New York Times Co. were trading at $46.19, which is sandwiched between its 52-week range of $39.73 and $58.73.