If you can’t find a partner to help defray costs, boost the price for your product. That appears to be the strategy for The Athletic following attempts at a merger with Axios, then the New York Times fell through.
Variety‘s Brian Steinberg reports that the subscription-based sports content site will increase its yearly rate to $71.99. The new subscription price goes into effect July 16.
Previously, an annual subscription to The Athletic cost $59.99. Yet many subscribers pay much less through promotional discounts or a T-Mobile cross-promotion bundle. The monthly subscription rate will remain $7.99.
“We have got 450 reporters, writers, editors, producers on three continents producing as much volume as any national newspaper in the world per week,” The Athletic CEO and co-founder Alex Mather told Steinberg, insisting the company has maintained the same price point from its earlier, smaller days.
According to Steinberg, company executives also believe that as appetite grows for live sports with the upcoming Summer Olympics and a return approaching normal with the NFL, NBA, NHL, and MLB, in addition to college sports, interest will increase in the content offered by The Athletic.
Negotiations on a possible merger with the NY Times ended in June when the two sides couldn’t agree on an acquisition price. While the company had previously been valued at $500 million, The Athletic was likely seeking more in a sale. Yet a media institution like the Times surely saw that price as significantly overinflated. Another obstacle is that several Athletic employees have equity in the company. How would they have been compensated under a merger?
Discussions with Axios took a different angle with the two companies looking into forming a SPAC (Special Purpose Acquisition Corporation) aimed at drawing investors and possibly adding more properties to the company. Also under consideration was selling premium subscriptions to businesses, a strategy that paid off for outlets like Politico.
Last year, The Athletic surpassed 1 million subscribers and has also generated ad sales through its large podcast network. Created in 2016 by Mather and Adam Hansmann, the company first launched in Chicago before expanding to Toronto, keeping a focus on baseball and hockey. By 2017, the operation expanded to several other markets including Cleveland, Detroit, and the Bay Area, extending coverage to include the NFL, college football, and NBA. Eventually, The Athletic established coverage for soccer, sports media, and motorsports, and has recently devoted more content to breaking news.
The Athletic could still pursue a merger with another company, Variety reports. But this subscription rate increase indicates that the platform needs to generate revenue on its own without the buoy a partnership could provide.