The Athletics months-long quest for a buyer continues.
Buyout talks between The Athletic and the New York Times Co. recently ended by mutual agreement after the two parties were unable to come to terms on price, according to The Information. They also couldnt come to terms with how employees of The Athletic could be compensated for the equity they have in the sports media site following a sale, The Information says.
According to the Wall Street Journal, The Athletic viewed the New York Times as a leading contender to merge since the sites subscription businesses would complement one another. The Times subscription growth, which exploded during the pandemic, slowed during the most recent quarter, so the newspaper publisher would also have benefitted from a deal.
Its the latest in a string of setbacks for The Athletic.
Earlier this year, Axios and The Athletic ended discussions about joining forces and forming a Special Purpose Acquisition Corporation (SPAC). Merger talks between Vox and The Athletic also went nowhere, according to Axios.
Founded in 2016, The Athletic has raised $139.5 million from investors. The latest funding round was $50 million in Series D financing in January 2020 that gave the company a valuation of about $450 million, according to Crunchbase.
It isnt clear why the media world isnt interested in buying whatever The Athletic is selling.
A spokeswoman for the Times said, As a general matter of policy, we do not comment on rumors about potential acquisitions or divestitures. The Athletic didnt respond to an email seeking comment for this story.
However, I suspect that one of the reasons why The Athletic is having trouble finding a buyer is that the site either is unprofitable or operates on a modest margin. The companys 2020 revenue was reportedly $80 million. Finding ways to grow The Athletics business will be a challenge.
For one thing, The Athletic is competing against much larger rivals in the sports media market such as Walt DisneysDIS ESPN, WarnerMedias Bleacher Report, and Spotifys The Ringer podcast network, which give away much of their content for free. Unlike its competitors which have advertising, The Athletic relies solely on subscription revenue to pay its bills.
Like other media sites, The Athletic didnt escape the Pandemic unscathed. The company laid off 46 employees in June 2020, roughly 8 percent of the publishers staff as live sports ground to a halt as the world faced its worst public health crisis in more than a century. It also slashed salaries and travel spending.
The Athletic has a staff of more than 600, many of which were among the countrys best sportswriters, such as Hall of Fame Baseball Scribe Jayson Stark. Not surprisingly, top talent doesnt come cheap. According to The Wall Street Journal, The Athletics expenses are significant.
