A few weeks after interest was first reported, there’s another (stronger) report linking the New York Times and The Athletic in acquisition talks.

That’s from Sara Fischer at Axios, who reports that the move wouldn’t be a merger, but instead the Times would buy the entire company outright. Somewhat ironically, the Axios report includes mention that the Times moved to explore the acquisition after The Athletic and Axios backed away from their own talks earlier in May. When that happened, the Times was mentioned as a possible suitor, and a desirable one from The Athletic’s perspective.

From Fischer’s report today, which suggests that those talks have indeed picked up steam:

The New York Times is looking into a potential acquisition of The Athletic, three sources familiar with the matter tell Axios.

Driving the news: Sources say The Times approached The Athletic following a report about a potential deal between The Athletic and Axios in March.

  • The Wall Street Journal reported in May that The Athletic and Axios are no longer in talks for a potential merger via SPAC, and that The Athletic viewed The Times as a better contender for a merger.

The Times has been reaching out to former employees to vet The Athletic’s business and culture, sources say.

  • The Times is eyeing a full acquisition, not a joint venture or strategic partnership.
  • The Athletic raised $50 million last year in a Series D funding round, just before the pandemic, putting its latest valuation at around $500 million.

That kind of background work suggests this isn’t merely for show. The Athletic has always felt destined for an exit like this; after all, the various rounds of fundraising and the entire vibe of the site’s founders felt much more like a tech startup than anything else. Between the Axios talks, the mention of Vox also considering The Athletic, and now the increasing smoke around the Times, it feels like they’ve ramped up that particular avenue of exploration in 2021.

The Times would be making a bit of a leap here; they’ve bought and integrated outside companies before (Wirecutter, for example), but The Athletic would be a big organization to absorb. When the Times interest was first reported earlier this month, this is what we wrote about the prospect:

Details of the potential acquisition are minimal at this point, and it would be tough to imagine the Times absorbing all of The Athletic’s lauded local coverage (and the added costs that go along with it) with a smile on their face. And if The Athletic’s local coverage disappears, or is severely reduced, as a result of a merger or acquisition, how many of the site’s million-plus subscribers will go along with it? And if that happens, how much value would the company actually have to a buyer?

It’s a tricky situation for a buyer. If you buy The Athletic, in part for its subscriber base, and don’t commit to maintaining (if not expanding) the coverage those subscribers are used to, how long will those subscribers stick around? And if there’s going to be churn with the subscriber base if you reduce coverage, would your original offer be as high?

If The Athletic does get sold, the ideal buyer has to be one that commits to the current level of coverage at a bare minimum.

The Axios report addresses the synergistic fit both sides see, though it’s understandably still more of an abstract view:

The deal would help bolster The Times’ subscription strategy, especially if it were to one day bundle its existing subscription offerings.

  • The Times has nearly 8 million total paid subscribers, with nearly 7 million paying for just digital products. It’s on pace to meet its goal of 10 million digital subscribers by 2025.
  • The Times could possibly include The Athletic’s sports subscription business as part of a larger subscription bundle.
  • The Times sells subscriptions around its core news product, games, cooking and audio. It’s currently testing subscription offerings for its consumer reviews site, Wirecutter, as well as NYT Kids.

It would certainly be something if the site that was borne out of a stated desire to disrupt the world of online sports media ended up in the portfolio of the New York Times, the symbol of traditional American journalism. On the other hand, maybe subscriptions are subscriptions.

[Axios]

About Jay Rigdon

Jay is a writer and editor for The Comeback, and a contributor at Awful Announcing. He is not a strong swimmer.