The Athletic has been linked to possible deals with the New York Times, Vox, and Axios. But it makes as much sense for the subscription-only startup to align with traditional media giants looking to build subscriptions via new streaming platforms, according to investor Dave VanEgmond, who advised The Athletic on its sports betting partnership with BetMGM.
The founder of Bettor Capital cites NBCUniversal — with its new Peacock streaming service — as a possible example. Peacock offers live coverage of sports properties ranging from the Olympics and Premier League to golf, tennis and IndyCar.
With over 1 million paying subscribers, The Athletic “makes a lot of sense for those businesses as people move into subscriptions,” VanEgmond said. “If everyone is buying Peacock because it has a lot of sports content, it would make sense for NBC — which has no real digital assets in sports other than the failed Rotoworld experiment — to do something. I think you could say the same for a bunch of companies.”
Fox, for example, recently acquired Outkick Media because it was “craving” more content in digital and a way to monetize the betting category, he noted. A deal involving The Athletic could take the form of strategic alliance or an acquisition. Both are a “strong” possibility, VanEgmond said.
“In my mind, The Athletic is on a roadmap to try to get to bigger scale: try to get to 3 [million subscribers], to 5 [million subscribers]. How big can they get the paid-subscriber base? And have a bigger funnel of prospective customers or users within a bigger digital platform. That’s synergistic to me.”
VanEgmond knows whereof he speaks. The former Barstool Sports and FanDuel executive is one of the key players behind the convergence of sports betting and sports media.
Before, he advised Outkick on its deal with Fox in May, he advised Barstool on its $163 million deal with Penn National Gaming.
While at FanDuel, he was involved in the betting giant’s sale to Irish suitor Paddy Power Betfair (later renamed Flutter). In January, he advised The Athletic on its deal to make BetMGM the site’s exclusive sports betting partner in the U.S.
“I think there’s a lot of organic growth for the company. The subscriber base is now over a million, as they’ve stated publicly before. The business has a very large expansion opportunity in covering sports betting and expanding into other sports.
“So I believe there’s plenty of growth in front of the company. Potentially a strategic alignment with a bigger company like the New York Times could make sense. With Axios, they were rumored around a SPAC. Certainly, The Athletic is a very interesting business for SPACs who are looking for compelling digital businesses with high growth potential.”
Guessing who would acquire or merge with The Athletic has become a popular parlor game within the sports news media industry since its launch in 2016.
Co-founded by tech veterans Alex Mather and Adam Hansmann, the site focused on underserved markets hit by the decline of newspapers before expanding into national — and even international — coverage in recent years.
Vox was also mentioned as a potential purchaser in an Axios article last month. The Washington, D.C.,-based media company already has a nationwide brand in SB Nation, a collection of about 200 blogs. Unlike The Athletic, Vox largely offers free content with a few exceptions, like New York Magazine, which it acquired in 2019.
“I was an early investor and love the people there, but they’re an ad-based business, and ad-based businesses are valued lower than subscription, recurring revenue businesses,” Washington Wizards and Capitals owner Ted Leonsis told Front Office Sports. “Strategically, the best thing [is] for Vox and a subscription-based kind of business to come together, or a gaming/gambling company, because they cover every sport.”
Before the pandemic hit, The Athletic had a valuation of around $500 million. Subscriber growth, however, slowed as COVID-19 took hold and forced sports to shut down for months last year.
The Athletic declined to comment on potential deals. “We do not comment on rumor or speculation,” said spokeswoman Taylor Patterson.