Athletic, Axios talking merger?

Sam Amick* is who you’re thinking about, I believe.

 

I'm a complete idiot. Not sure how that happened (the bad math part, not me being an idiot--that's been the case for a long time).

 

Think you just multiplied by 12 one time too many.

 

I think the Athletic has value to someone. I have been skeptical that the New York Times would be a buyer because they don't seem to be that interested in covering sports. Their current coverage of sports is not very broad. How big is the Times current sports staff? Probably in the teens. I suspect that their growth strategy is to build on the strengths of their news staff that is the best in the world.

Economically it would make sense for one of the three largest newspaper chains to buy the Athletic. I am just guessing here but off the top of my head I think that Gannett staffs 13 NFL teams, DFM staffs 11 and McClatchy staffs five. I would think MLB, NHL and NBA staffing numbers would be similar. Gannett also staffs a lot of the big college athletic programs. If one of those chains, particularly Gannett, acquired the Athletic they could eliminate a lot of duplicative beats reporters and save a lot of money. Gannett could also combine their USA Today national staffs and that of the Athletic.

But I think Gannett has too much debt to pay very much for the Athletic. DFM and McClatchy are controlled by hedge funds and I don't have any idea if they have enough money to buy the Athletic, even at a reduced price.

 

To the extent that the sustainability (survivability) of Gannett and McClatchy papers depend on getting people to pay for local news, why would either of those companies invest in an outlet that would provide local readers with primarily non-local sports?

Alden doesn't invest in anything like this.

 

Alden wouldn’t invest in anything that requires a further investment. Its only interest is the short-term cash an investment would generate.

The Athletic, though, would also be a silly investment for Gannett or McClatchy for the exact reasons you describe. It doesn’t make sense to take a business like The Athletic and try to integrate it into an old-media model. It would be like trying to put a Prius drivetrain into a Ford Crown Victoria.

 

I see your point. Print subscription revenues declined eight per cent YOY at Gannett. You are arguing that Gannett should just accept the inevitable and let the print product and thee company fade away. Which appears to be the current DFM strategy. And given the lack of success that virtually every traditional publisher has in converting to electronic publishing is quite likely the best strategy.

But Gannett keeps telling the world they will become an electronic success. At the end of the third quarter the company had 1.54 million electronic subscribers. Gannett has just launched a USA Today Sports + Premium Package. Gannett has also partnered on a Tipico USA Today Sports betting partnership. I do not think these products have much market recognition yet (I learned about them at the Gannett investor relations website). But the company does seem to have plans to grow in the sports journalism market.

Adding a million subscribers or so from the Athletic would certainly bolster the Gannett subscription numbers. Gannett could the USA Today sports section and the Athletic together, eliminate duplicate beats and introduce the Gannett salary scales tot eh Athletic. Gannett could also sell electronic ads and try to maximize the sports betting partnership.

I do not think Gannett has the money to pay anything close to 800 million dollars for the company. But if the price comes down far enough I think it would make sense.

Many of the same opportunities if DFM bought The Athletic though I agree that product investment is not part of the DFM corporate culture.

McClatchy is under new management and I don't know what the new owners view of the future of publishing is. Though McClatchy has been very aggressive in closing printing plants so they seem to have a pessimistic view of the future of the print product.

 

Negotiations with The Times have entered the “exclusive” stage.

The Times & The Athletic Are Getting Hot and Heavy

 

GoJo buys Woj.

 

The Athletic in the past has touted its technological prowess. How much that’s worth to the Times, which I assume already has plenty of audience engagement types in the building, I don’t know.