There’s been a lot of talk around possible acquisitions and mergers involving The Athletic this year. In late March, Ben Mullin of The Wall Street Journal reported that The Athletic was in talks with Axios about a potential merger. In early May, Mullin reported that those talks had ended, but that The Athletic was looking at other options, and “views The New York Times as a leading contender for a merger tie-up,” but that piece didn’t have details on if the Times was interested. That came in late May, when Sara Fischer of Axios reported that the Times was “looking into” buying The Athletic. However, not quite a month later, the Times is now no longer considering that, as per Sahil Patel of The Information:
Scoop: The New York Times and The Athletic have ended acquisition talks.
The companies couldn't agree on a price, sources said. Another sticking point: How employees of The Athletic that have equity would be compensated.https://t.co/9l8hENr3ZD
— Sahil Patel (@sizpatel) June 17, 2021
As per Fischer’s piece from last month, the most recent valuation for The Athletic is around $500 million (from the $50 million Series D round they concluded last January). However, a lot has changed since January 2020, so that valuation isn’t necessarily reflective of what The Athletic would be willing to sell for right now. Rafat Ali, the CEO of Skift and the founder of PaidContent, estimated that they’re likely asking for more than that, and that that might not be a good bet for the Times:
It is better for NYT not to pay venture exit multiples, in this case likely ask of between $600mn-$750mn for a company that did $80mn in 2020. For a responsible journalistic steward this seems like a crazytown numbers to bet on. https://t.co/LO3Cprks6i
— Rafat Ali, Media Owner & Operator (@rafat) June 17, 2021
AA’s Ben Koo added some notes on where this might go for them:
The Athletic is not in trouble or screwed but they are in the uncomfortable place of being
– likely not profitable
– feeling like an IPO is a reach
– seeing flattening growth
– passed on twice in acquisition talks
This is when things get real for founders and board members https://t.co/6xGdQlC34u
— Ben Koo (@bkoo) June 17, 2021
It is certainly interesting to see discussion of two high-profile mergers or acquisitions involving The Athletic, only for neither to seemingly ultimately get too far. And that may lead to some big changes in strategy; it’s possible the company might look more towards profit than growth (which could mean significant staffing cuts) before trying acquisition talks again. We’ll see where they go from here.