The Athletic spent much of last year like dozens of other media properties and news sites: on sale. 🚨 The sports-centric publication boasted over one million subscribers in Sept. 2020, making it a high-profile, target prospect for a sale. After nearly a year of rumors, the site has sold to The New York Times for $550 million.
With this acquisition, the finance majors at The New York Times are picking up a beefy (albeit, still unprofitable) business. The Athletic produced $47 million in revenue in 2020, with a net cash flow of -$41 million. In 2021, it was on track to do $77 million in revenue, with a slightly improved -$35 million in net cashflow. Nonetheless, investors liked the sound of this deal… because rising revenues and rising net cash flow can only lead to one thing, right? 😅 $NYT stock rose 4.6% today on the news.
We have been no stranger to covering the media industry in the Rip, which has turned to consolidation in recent years in an effort to boost immunity against Big Tech advertising competition. Last year saw some notable M&A action, especially in the SPAC space, for media players. However, the most star-studded deal of all was Buzzfeed’s public debut via SPAC (especially because the company used its SPAC proceeds to buy Complex Networks.) 💰 💰 So far, that SPAC’s performance has been a disaster, which does not induce investor confidence for the success of other media deals. 👎
That might be one reason why some companies are sitting out the public market gold rush. Vice Media abandoned the decision to go public in a SPAC or IPO, Vox Media bought Group Nine Media instead of rushing Wall Street, and Bustle Digital Group is on the sidelines with its own IPO. That could change… but traditional publishers haven’t put out the greatest metrics in the post-Trump era.
Somehow, in spite of all the headwinds against media, news media M&A was on fire in 2019, 2020, and 2021. As of Aug. 17, 2021, there were 67 M&A media deals in the U.S. alone since the start of 2019.
What can investors expect from the media biz going forward? A continuation of the same old, same old. More acquisitions, more consolidation, and more positioning against the media biz’s biggest enemy… Big Tech. 💀