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Athletic, Axios talking merger?

Discussion in 'Journalism topics only' started by FileNotFound, Mar 26, 2021.

Page 9 of 37
  1. Pilot

    Pilot Well-Known Member

    I always thought some kind of cross-country team package might be an answer to all sports journalisms ills. For instance, let’s say I want to follow all the Denver teams. I don’t want to subscribe to, say, the KC Star for just a few Broncos-related articles a year, but I definitely want to read anything relevant and AFC West-related.

    So for my $10 a month, I get all the relevant Denver Post coverage, plus any relevant stories from anywhere else in the country without having to jump through browser hoops or pay for a few months of a paper I only have passing interest in. It’s a fantasyland idea given all the different ownership groups and everything but just a dream.

    The Athletic makes my idea somewhat irrelevant, though I’m not sure I like The Athletics offerings more than either the Post or the Star in either city at this point. But it’s certainly a vast improvement from, say, ESPN’s coverage of the regions.
     
    Pilot, May 11, 2021
    #97
  2. ChadFelter

    ChadFelter Active Member

    Gannett could offer some kind of giant sports bundle but they only execute good ideas when it's too late.
     
    ChadFelter, May 12, 2021
    #98
    Woody Long and PaperDoll like this.
  3. LanceyHoward

    LanceyHoward Well-Known Member

    I have never worked at Gannett but the company seems to have developed a strong corporate culture which served them well for a very long time. Gannett was once hugely profitable.

    But that culture seems to me to be a hinderance now. The company to me to be stuck between the old, formerly lucrative past and the electronic future. Dickey seemed to me to probably be a good sales manager (he came up through sales, no?) and was like a deer caught in headlights as CEO. And the new guy, Reed, is in way over his head. Reed's function as CEO of Gatehouse was to cut costs. I don't think he has a clue how to build something.
     
    LanceyHoward, May 12, 2021
    #99
  4. ChadFelter

    ChadFelter Active Member

    I worked at three different Gannett papers. Every good new strategy was something that other papers were already doing. We were never the ones ahead of the curve.
     
    ChadFelter, May 13, 2021
    #100
  5. Regan MacNeil

    Regan MacNeil Well-Known Member

    In which Axios, part of the initial proposed merger, reports on a potential merger between The Athletic and the NYT.

     
    Regan MacNeil, May 25, 2021
    #101
  6. Screwball

    Screwball Active Member

    The Athletic seems to be pushing really hard. The Axios reporter is the favorite mouthpiece of the Athletic's leadership, and the report notes that the Athletic declined to comment "on the record." Previous stories about this possibility (from other reporters) have made clear the Athletic was pushing this. It's less clear whether the NYT is seriously interested. Maybe something happens, but if there's one thing I've learned from covering deals, it's this: The deals that get talked about the least get done. The deals that get talked about the most tend not to get done.
     
    Screwball, May 25, 2021
    #102
  7. The Big Ragu

    The Big Ragu Moderator Staff Member

    The NY Times has an impressive history of paying ridiculous sums to acquire things, only to unload them later for much less. So who knows?

    But if all of the reports since earlier this year are true, the Athletic is still unprofitable and had only $80 million of revenue last year, on a valuation of half a billion dollars in its last capital raise.

    Even stipulating that we are in an M&A bubble due to an artificial interest rate environment luring people into what would otherwise be insane behavior. ... 6 to 7 times revenue (or more) would be a crazy premium.

    The Times itself trades at only 3 or 4 times sales (and in more normal, non-bubbles times was closer to 1 times sales), and it is a profitable company that until recently was doing a lot of things right.

    I couldn't see anyone who is sober paying more than somewhere between $100 million to $300 million for the Athletic based on those numbers, and even that would be pretty rich based on the usual "synergies" and hopium talk. What I don't see happening is the owners, including capital that bought in at a higher valuation, being willing to take that. ... unless they are panicking for some reason.

    So how does it work?
     
    The Big Ragu, May 25, 2021
    #103
  8. wicked

    wicked Well-Known Member

    The Times has figured out a way to make digital subscriptions work.

    The Athletic still isn't there yet, but could be with help from the Times (and just the name association alone).

    The Times' sports coverage is a relative weak link, and the Athletic fills that hole.
     
    wicked, May 25, 2021
    #104
  9. The Big Ragu

    The Big Ragu Moderator Staff Member

    So the Times could very conceivably bundle what it already has with the the Athletic to drive growth and increase sales.

    It can conceivably even drive so much revenue (or cut costs somehow) that they can make it profitable and keep it that way.

    The question is valuatio. And it should be bigger than a lot of people seem to realize. The Athletic got a valuation of more than half a billon dollars in its last capital raise, which if you believe the numbers that have been reported, has it trading at 6 to 7 times sales, which is a huge premium for a media company -- let alone one that is chugging along unprofitably and may actually be slowing down growthwise.

    If that $500 million is the starting point, how do you justify the price based on where it is? And if that is a sticking point (as it should be, other than money being essentially free still), are the people who have funded the Athletic at a high valuation, willing to sell at a discount to what they paid?

    I'm not discounting the idea that the Times will pay a ridiculous price. That is the behavior the Federal Reserve engineered. But that kind of M&A activity may have already peaked. They were too late getting that SPAC deal in with Axios (there was an insane SPAC frenzy, a lot of stupid money being tossed around because of all the liquidity. ... and then it dried up really quickly). So now they are trying to cash in in an M&A market that is still frothy. Can they still get that kind of frothy pric, or were they too late there, too?
     
    The Big Ragu, May 25, 2021
    #105
  10. wicked

    wicked Well-Known Member

    I do not know how much back of the house staff (HR, billing) there is at The Athletic, but I'm sure it takes a fair bit of work to stand up those operations. The Times already has that in place.
     
    wicked, May 25, 2021
    #106
  11. BYH 2: Electric Boogaloo

    BYH 2: Electric Boogaloo Well-Known Member

    Douchey tech bros begging for a print product to save them. You hate to see it.
     
    BYH 2: Electric Boogaloo, May 25, 2021
    #107
    2muchcoffeeman, MeanGreenATO and Sports Barf like this.
  12. Michael_ Gee

    Michael_ Gee Well-Known Member

    BYH, the days when the Times Co. could be described as a print product are long over.
     
    Michael_ Gee, May 25, 2021
    #108
    ChadFelter and BYH 2: Electric Boogaloo like this.
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