The New York Times Co. has agreed to purchase sports media outlet The Athletic for $550 million in cash, according to a report. The deal, reported by The Information, ends a months-long process during which the subscription-based sports news website was searching for buyers as it reportedly was hemorrhaging cash. An official announcement is expected at the close of trading on Wall Street on Thursday. Shares of the New York Times Company rose by more than 2 percent in trading after news of the deal leaked. The Times’ addition of The Athletic to its portfolio also gives it access to the sports site’s more than 1 million paid subscribers. That brings the Times closer to its stated goal of reaching 10 million subscribers by the year 2025. The Gray Lady reported this past September that its pool of digital and print subscribers totals 8.3 million customers. Of those, 7.6 million are digital-only. Nearly 5 million of the digital-only subscribers were added during the four years in which Donald Trump was president. But subscription growth at the paper’s digital sites slowed after Trump left the White House following his election loss to Joe Biden. Initial discussions between the Times and The Athletic were initiated last spring after the Wall Street Journal reported on a potential merger between the sports site and Axios. In August, the New York Times Company released a quarterly earnings report indicating it was sitting on close to $1 billion in cash. Investors consider holding excess cash to be an inefficient use of capital and would rather see the money put to work through investments or acquisitions. The Times Company has not been aggressive in acquiring assets in recent years. The Athletic deal is the first major acquisition since the company spent $25 million in 2020 to acquire Serial Productions, the company that creates the hit podcast “Serial.” Meanwhile, in the current deal, the co-founders of The Athletic, Alex Mather and Adam Hansmann, will stay on with the company after the deal, according to Axios. Mather and Hansmann left the exercise app Strava and founded The Athletic in 2015. The Athletic offers customers ad-free coverage of all major professional sports teams for a subscription cost of $7.99 per month — competing against other major sites like ESPN, Bleacher Report, Yahoo! Sports, and The Ringer, which do not charge readers for content. After a number of regional newspapers nationwide laid off staffers, including from many sports sections, The Athletic went on a hiring spree, building up its 600-person team of writers and reporters based across North America, the UK and Australia. But the company has gone through turbulent times in recent years. Between 2019 and 2020, it lost nearly $100 million in cash. During the pandemic, it was forced to lay off staffers as sporting events were canceled. So far, it has raised $140 million in funding. After raising $50 million in January 2020, it was given a valuation of $500 million. The Athletic has not disclosed financial details about its operations, though it reportedly generated $80 million in revenue in 2020.
