Built on the the promise of no advertisements, The Athletic seems to be rethinking some core tenants of their strategy as the site struggled to find a buyer. With 1.2 million subscribers, The Athletic has done well proving the thesis that there are fans willing to pay for sports news and analysis. But after five years, it seems The Athletic’s growth has begun to plateau a bit which, a not so great development especially amidst the backdrop of the site seeking a buyer.
In article by Bloomberg, The Athletic seems to admit that they’ll have to have move away from the more sturdy paywall they’ve built their business on, as well as growing their advertising revenues if they hope to achieve a sale in their targeted $600 million and $800 million range. Thus far there hasn’t been much interest as The New York Times reportedly valued The Athletic at “less than $500 million” before walking away from acquisition talks and sports betting company FanDuel denying interest in purchasing the company.
On the paywall front, the Bloomberg article hints at more content going in front of the paywall.
“When everything is paywalled, you’re limiting the audience you can reach every single day,” co-founder Alex Mather said in an interview last week. “For us to reach 5 million or 10 million subscribers, we’re going to have to reach more sports fans, give them a taste of our product, find ways to bring then into our universe and engage them and hopefully get them to become a paid subscriber.”
Mather goes onto say that video and podcasts could be core to that strategy as a way to promote paywalled articles and drive subscriptions, both of which would rely more heavily on advertising. Mather isn’t wrong with this mindset, it’s just a little odd to be having such a realization this late in the lifecycle of the company.
In 2018, The Athletic hired Armen Keteyian to produce short-form documentaries originally meant for subscribers behind the paywall. Bloomberg reported that new subscribers from each video “often measured in the hundreds” and wasn’t worth the $50,000 cost to produce each doc. Nowadays, The Athletic posts their videos on YouTube to everyone while Keteyian and crew left the company in 2020.
Podcasting has been somewhat more successful for the company but is still yet to achieve the success other sports media companies are having in the space. Podcasts were originally ad-free and behind a paywall. As a result, some shows had “as little as a few hundred listeners” as the largest shows “drew an audience of close to 50,000.” Eventually, The Athletic unlocked their podcasts to everyone and included ads which has resulted in 10 million downloads per month according to Mather.
The Athletic’s strategy of all of their content behind a paywall seemed centered around showing the value of their content bundle but seemed to come at a cost of letting sports fans gain familiarity with the brand and its content. It seems now the company is realizing further growth of their subscriber base will require a larger funnel of sports fans consuming their content before deciding if they want to become paying subscribers.
Things aren’t as dire as they seem. The Athletic have come through the COVID-19 pandemic and even though they feel they’re worth more, the NYT did value The Athletic at half a billion. That and The Athletic reportedly has enough cash to cover “about the next eight months” and has raised money from some notable investors.
That being said, the next year will be a crucial one for The Athletic. Not only in regards to their fate but how their fate will alter sports media as a whole.