The $550 million acquisition of The Athletic is "a very big bet" and one that The New York Times "believes in and is going to get right".
The above sentiment is according to David Perpich, Publisher of The Athletic & Wirecutter, a 12-year veteran of the company who was previously responsible for overseeing the standalone products and businesses at the NYT including Wirecutter, Cooking, Games and Audio, and entrepreneurs-in-residence exploring new opportunities.
What's the deal?
The New York Times wants The Athletic to be profitable in three years, but it’s currently losing money—$6.8 million in February 2022 and March 2022 and another $12.6 million in Q2 2022, according to the Times public filings, which is a significant drag on the company’s bottom line.
“The space for what the Athletic does is massive,” Perpich said. “And when you think about the different moments in somebody’s life, as you’re building an essential subscription, there’s the news; there’s food; there’s games. Sports is one of those big things as well. And that’s why we made the largest acquisition we have in 30 years.”
The bottom line:
There are challenges ahead as The New York Times more deeply integrates The Athletic across its platform and subscription bundles including competition between each publisher's newsrooms and the potential unionization of The Athletic staff. Ultimately, The Times is relying on The Athletic to help it grow from 10 million subscribers to 15 million subscribers by 2027 while asking The Athletic to reach profitability within the next 3 years.