There’s been a lot of talk about what’s ahead for The Athletic following merger/acquisition talks with Axios and then The New York Times earlier this year (both of which ended with no deal). As per a report from Sahil Patel and Jessica Toonkel of The Information Wednesday, The Athletic is now back on the market, and has retained investment bank LionTree to look for a buyer (but that report notes it’s possible the company will conduct a new funding round instead of selling). And they’re reportedly asking for more than $750 million as a purchase price.
Is The Athletic worth that? Well, they’ve certainly raised a fair bit of funding ($145 million since 2016, as per PitchBook). And that article notes that they were valued at $530 million after a fundraising round last year, and that their revenue is doing quite well in 2021. Their 2021 revenue is projected to be $80 million, a 50 percent year-over-year jump. Year-over-year data obviously needs to be taken with some context considering the ongoing pandemic and all the effects that had in 2020, including on sports, but that’s still a good jump. And they’re projecting further growth to $120 million in 2022; those projections can be debated, but it’s notable that that’s what they’re projecting.
Perhaps the most interesting element of this report is The Athletic’s hiring of LionTree. It’s easy to have “conversations” or “talks” about mergers and acquisitions, especially when it’s never really spelled out what stage those talks are at. But retaining a known firm to sell your company is maybe a little more significant, as that’s an actual significant expenditure (and it’s probably one you wouldn’t be eager to make if this was all pie-in-the-sky).
Granted, there’s still lots of caution in that Information piece, including the idea of a new funding round (and it’s notable that there are a lot of firms out there looking to make investments in the sports space, especially with the increasing legalization of gambling in the U.S.), so this doesn’t mean The Athletic will assuredly be bought. But there are certainly some notable details here that suggest there are some serious talks going on.