New York Times Co. to Buy The Athletic for $550 Million

The deal could help the media company reach its goal of 10 million subscriptions ahead of schedule.

The deal could help the media company reach its goal of 10 million subscriptions ahead of schedule.

The New York Times Company has reached an agreement to buy The Athletic, the online sports news outlet with 1.2 million subscriptions, in an all-cash deal valued at $550 million, The Times said on Thursday.

Started in Chicago in 2016 by two media entrepreneurs, Alex Mather and Adam Hansmann, The Athletic was made for die-hard fans who were not finding the in-depth coverage they craved at a time when newspapers were in decline, Sports Illustrated was sold and ESPN began laying off journalists.

The Athletic hired prominent sports journalists from across the country, bringing coverage of games and the latest sports developments to readers who had grown accustomed to getting their news online. It had a reporter covering nearly every major professional sports team in North America, as well as several top European soccer clubs, while also serving up magazine-length feature articles and podcasts.

The site now has about 600 employees — roughly 400 of them in its newsroom, making it the second-largest employer of sports reporters in the country, behind the Disney-owned ESPN. Like a number of digital media companies that have found success in recent years, The Athletic relies on subscribers, rather than advertisers, as its main source of revenue. A significant injection of cash came in January 2020, when The Athletic raised $50 million from a number of investors.

Recently, as its rapid subscription growth began to slow, The Athletic has explored various options, including selling a minority or majority stake in the company, with private equity firms and corporations as potential buyers.

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The deal is expected to close in the first quarter of 2022. The Athletic will operate as separately run subsidiary of The Times, according to the statement announcing the deal, and its founders, Mr. Mather and Mr. Hansmann, will report to David Perpich, a Times executive who will assume the new title of publisher of The Athletic.

The deal will bring hundreds of additional sports reporters to The Times’s current staff of about 40 sports journalists. Their added expertise could do more to attract readers who may not have been inclined to become subscribers.

For The Times, the addition of The Athletic will also mean an infusion of paying readers. Meredith Kopit Levien, the company’s chief executive, has consistently emphasized the importance of adding digital subscribers since taking charge of the paper’s business in 2020. At the end of the third quarter of 2021, the paper had reached 8.4 million total subscriptions.

“We are now in pursuit of a goal meaningfully larger than 10 million subscriptions and believe The Athletic will enable us to expand our addressable market of potential subscribers,” Ms. Levien said in the release on Thursday.

The paper’s growth has included acquisitions. In 2016, the Times Company bought the product recommendation site The Wirecutter and its sibling site, The Sweethome, for more than $30 million. In 2020, The Times bought Serial Productions, the company behind the “Serial” podcast, for more than $25 million.

Mr. Mather, The Athletic’s chief executive, and Mr. Hansmann, its president, met while working for the exercise app Strava. When they started their site, they said much of the nation’s sports coverage was “empty calories” produced by slowly dying newspapers, adding that a media company focused on journalism for sports fans would be better for readers.

Early on, Mr. Mather boasted in an interview with The Times that The Athletic’s goal was to let local newspapers “continuously bleed until we are the last ones standing.”

Katie Robertson contributed reporting.

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