New York Times Agrees to Purchase the Athletic

Acquiring the Athletic could give the Times a boost as its subscription growth, which boomed during the Trump years, slows down. The company in November warned it could experience subscription cancellations in the fourth quarter of 2021 as it ends promotional pricing. The Times said third-quarter net profit rose 63% as it signed up 455,000 new digital subscribers and enjoyed robust advertising growth.

“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,” Meredith Kopit Levien, president and chief executive of the Times, said in a statement. “Strategically, we believe this acquisition will accelerate our ability to scale and deepen subscriber relationships.”

The Information earlier reported the New York Times agreed to acquire the Athletic. The Wall Street Journal reported last May that after exploring various deal options the Athletic viewed the New York Times as a leading contender to buy the company.

The transaction is expected to close in the first quarter of 2022.

The deal adds to a flurry of publishing-industry mergers meant to propel digital growth and build up lines of business, from digital advertising to e-commerce to subscriptions. BuzzFeed Inc. acquired Complex Networks as it went public in December through a special-purpose acquisition company. Vox Media agreed in the same month to acquire Group Nine Media Inc.

In October, Barry Diller’s IAC/InterActiveCorp. agreed to purchase magazine publisher Meredith Corp., a bet on online publishing that will combine brands such as People, Better Homes & Gardens and Investopedia.

Acquiring the Athletic would make the Times a much more aggressive player in sports media. Ms. Levien said the Athletic’s deep coverage of individual teams and players will complement the Times’ more general-interest sports coverage.

The deal will continue the Times’s efforts to diversify its subscription offerings. In the third quarter, 320,000 Times subscriptions were for its core news offering while 135,000 were for lower-cost offerings such as its games and cooking product and its Wirecutter product-recommendation site. Overall, the Times had more than 8.3 million paid subscriptions across its digital and print products.

“The Athletic will enable us to expand our addressable market of potential subscribers,” Ms. Levien said.

The Athletic was founded in 2016 by Chief Executive Officer Alex Mather and Adam Hansmann, veterans of the exercise app Strava. The company expanded aggressively, recruiting established reporters and columnists in local markets, often by offering big pay increases. It recruited writers such as Richard Deitsch, who spent decades at Sports Illustrated, and Ken Rosenthal, a veteran Major League Baseball reporter.

Unlike many of its competitors, whose sites are free and ad-supported, the Athletic focused on subscriptions. The company was valued at $475 million in a funding round announced in January 2020, according to PitchBook.

The Athletic hasn’t disclosed detailed financials, including whether it is profitable. The company generated about $80 million in revenue in 2020, according to a person familiar with the matter. The company had more than 600 full-time employees as of last year.

The Athletic began ramping up deal conversations last year. The company explored a tie-up with Washington, D.C.-based Axios that could have involved a merger with a special-purpose acquisition company, the Journal reported. Those talks fell apart.

Write to Alexandra Bruell at [email protected] and Benjamin Mullin at [email protected]