Much ink has been given to The New York Times Company’s buyout of sports website The Athletic. One recent story covers how management might integrate The Athletic’s subscription model into the one already employed by the Times. The other covers a dispute between the paper’s sports department and management about how The Athletic will affect their jobs. Lost in the conversations is that New York Times Company management overpaid for The Athletic and may never earn their money back, at least in constant dollars.
The Wall Street Journal story concentrated on Times executive David Perpich who led the purchase of The Athletic. He assumes that The Athletic will be successful because subscribers will “bundle” it with their subscription to The Times. This is a stretch since most people do not buy The Times for sports. It is a relatively small part of the overall coverage in the paper.
The Washington Post’s article focuses on the near revolt among Times sports writers. They fear they will be folded into The Athletic, which may eliminate some of their jobs. The newsroom tension has and will make it harder to combine the work of the Times sports writers and those at The Athletic.
The Times paid $550 million for The Athletic in early 2022. It had never made a dime, and that is still the case. The Athletic’s owners walked away with an extraordinary deal.
In the most recent quarter, The Athletic’s revenue rose from $12.2 million to $28.6 million. However, the first quarter of 2022 only included two months of The Athletic’s revenue. Otherwise, the increase would have only been $7 million. It lost $7.8 million compared to $6.8 million the year before. When adjusted for the two months, the loss dropped $1.3 million. The Athletic’s run rate loss for the year will be $31 million. Perpich thinks the bundling system will improve that, a position he has taken without evidence that has been made public.
Arguably, the weakening major category of news coverage The Times had before the purchase was sports. That may be because Times readers are not interested. That will continue to show up in the losses.
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