[News] The New York Times buys The Athletic for $550 million US

[sureLoss]

https://investors.nytco.com/news-and...e-The-Athletic

The New York Times Company (NYSE: NYT) announced today that it has entered into an agreement to acquire The Athletic, the global digital subscription-based sports media business that provides national and local coverage of more than 200 clubs and teams in the U.S. and around the world, for an all cash purchase price of $550 million, subject to customary closing adjustments. The transaction is expected to close in the first quarter of 2022.

Meredith Kopit Levien, president and chief executive officer of The New York Times Company, said, “Acquiring The Athletic puts us in a position to be a global leader in sports journalism and offer English speakers around the world another reason to turn to the Times Company to meet their daily news and life needs. The Times already provides distinctive sports coverage for a general interest audience as part of our core report. As a stand-alone product, The Athletic will enable us to offer much more — extensive coverage for fans who seek a deep connection to and understanding of their favorite teams, leagues and players. With one of the largest dedicated teams of reporters covering sports globally and a commitment to everyday reporting, The Athletic is a great complement to The Times.”

The Times has been rapidly growing its consumer subscription business, doubling to over 8 million paid subscriptions across digital and print products in the last three years.

[burn_this_city]

Might make subscription cheaper over the long term. NYT electronic subscription is only $4 a month.

[dustygoon]

Unreal price for a traditional business with $70-80mm of revenues. SaaS type multiple for a media business? They burn cash of course. Do you think Myrtle had equity (Toronto was 2nd town after Chicago to build a team and he was lead editor)?

[greentree]

Originally Posted by burn_this_city

Might make subscription cheaper over the long term. NYT electronic subscription is only $4 a month.

That's an introductory offer for 12 months, but their regular rate of US$17/month is still a good deal for a such a high-quality newspaper with great reporters and bureaus all over the world. The company has the muscle to build up a subscriber base via low prices. I renewed my lapsed Athletic sub yesterday for $12/year (one year only) and am really pleased to have both subs!

[Captain Otto]

Originally Posted by dustygoon

Unreal price for a traditional business with $70-80mm of revenues. SaaS type multiple for a media business? They burn cash of course. Do you think Myrtle had equity (Toronto was 2nd town after Chicago to build a team and he was lead editor)?

Can someone translate this please?

[corporatejay]

Originally Posted by Captain Otto

Can someone translate this please?

He's saying the multiple they got was similar to a multiple for businesses that offer "software as a service" which is a fancy way of saying a subscription based software model.

[Elkyiv]

Originally Posted by Captain Otto

Can someone translate this please?

[Ducay]

Found the Athletic to be, if nothing else, good writing and unbiased. Who knows what sort of lens the NYT will bring given they're about as "corporate media" as you can get.

Sad change that will certainly not increase subscribers (to a standalone Athletic product)

[Moneyhands23]

Well I guess on my pricapals/political beliefs I will now cancel my subscription to the athletic

[dino7c]

Originally Posted by Ducay

Found the Athletic to be, if nothing else, good writing and unbiased. Who knows what sort of lens the NYT will bring given they're about as "corporate media" as you can get.

Sad change that will certainly not increase subscribers (to a standalone Athletic product)

as if they are Oiler fanboys like the rest of them

[Roughneck]

Originally Posted by dustygoon

Unreal price for a traditional business with $70-80mm of revenues. SaaS type multiple for a media business? They burn cash of course. Do you think Myrtle had equity (Toronto was 2nd town after Chicago to build a team and he was lead editor)?

I was thinking who, if any, of the somewhat marquee names they had got any equity, however large or small. I think of a guy like Eric Duhatschek who had about as good a gig as a sports writer could hope for. Surely there had to be something extra to incentivize guys like him to join the venture in its relatively early days.

Because I hope they did, and they’re getting rewarded for it.

[Stampede2TheCup]

Originally Posted by dustygoon

Unreal price for a traditional business with $70-80mm of revenues. SaaS type multiple for a media business? They burn cash of course. Do you think Myrtle had equity (Toronto was 2nd town after Chicago to build a team and he was lead editor)?

Originally Posted by Captain Otto

Can someone translate this please?

He’s saying it’s surprising the Athletic got a valuation as high as SaaS businesses when looking at their price to earnings ratio. The price to earnings ratio is commonly used as a metric the assess the value of businesses, in combination with the type and structure of the business. As mentioned, SaaS is an acronym for Software as a service which I presume he’s saying fetches a high price to revenue valuation. The Athletic are still burning cash, meaning they still aren’t profitable yet.

I don’t actually know what I’m talking about, I’m just parroting stuff from this guy:

[Boreal]

Originally Posted by dustygoon

Unreal price for a traditional business with $70-80mm of revenues. SaaS type multiple for a media business? They burn cash of course. Do you think Myrtle had equity (Toronto was 2nd town after Chicago to build a team and he was lead editor)?

The real question is more of a how they will structure subscriptions.

Do they remains separate entities and you get a subscription with a NYT subscription?

If Mirtle has equity I would imagine it is structured as dividends because he has a brand and an audience that they want him to produce content for.

He’s the made the argument that a subscription requirement is the only sustainable format for journalism.

But… does he just cash in and write books?

I guess we will find out.

[Azure]

Always thought the Athletic will only be as good as the people who write for them.

People who write for them are currently good, but how many are going to stick around?

Also, only way they could get big name reporters to work for them is by offering them equity. Which I assume is good right now as many of them would have gotten paid, but how long will they stick around?

Subscription based reporting is a good business, but not when its tied back into corporate media.

[calumniate]

I have a nyt subscription but cancelled my athletic sub a couple of years ago. It seemed to focus on the oilers too much! Maybe that will change, but probably not

[VladtheImpaler]

Given the evil that is NYT, I will have to cancel my subscription. Oh well.

[dustygoon]

Originally Posted by Stampede2TheCup

He’s saying it’s surprising the Athletic got a valuation as high as SaaS businesses when looking at their price to earnings ratio. The price to earnings ratio is commonly used as a metric the assess the value of businesses, in combination with the type and structure of the business. As mentioned, SaaS is an acronym for Software as a service which I presume he’s saying fetches a high price to revenue valuation. The Athletic are still burning cash, meaning they still aren’t profitable yet.

I don’t actually know what I’m talking about, I’m just parroting stuff from this guy:

Sorry guys. I was writing fast. But ya....software businesses with subscription models have sticky revenues => once someone subscribes, they rarely cancel even in economic downturns. That is extremely valuable (more so than the old license model). So their stocks trade at very high multiples of that revenue stream rather than profit....many SaaS companies don't make profit except for the bigger older ones like adobe....and they don't care because the market has agreed that revenue is the key metric. Anyway....$550m for the athletic which generates $75m of revenues is ~7x value/revs. That's getting close to the kind of value that software companies with sticky revenues trade at. I just don't believe the athletic's subscribers are that resilient.

[Erick Estrada]

I like The Athletic. It's the best Raiders coverage ever for a fan in Canada. Lots of good hockey stuff as well.

[blender]

Originally Posted by calumniate

I have a nyt subscription but cancelled my athletic sub a couple of years ago. It seemed to focus on the oilers too much! Maybe that will change, but probably not

You can tailor your feed to meet your own needs.
I only tune unto the Oilers coverage when they hit the skids.

[blender]

Originally Posted by VladtheImpaler

Given the evil that is NYT, I will have to cancel my subscription. Oh well.

Please enlighten me about how evil the NYT is.
Honest question.