Quote:
Originally Posted by aaronffs
https://www.vox.com/recode/22870773/...lion-explained
"The reason the Athletic is selling for $550 million — less than the $750 million the company was reportedly seeking, and around the value its investors thought it was worth in February 2020, when it last raised money — is because it has to.
As The Information’s Jessica Toonkel has reported, the startup burnt through more than $100 million in 2019 and 2020. In 2020 alone, when sports went dark for much of the year, it lost $41 million on revenue of $47 million. And even its most optimistic projections had it losing money until at least 2023. "
It's not a profitable business, buying the highest profile local writers and constantly offering discounted subscriptions isn't exactly a winning short term model... but I agree with both of you, the content is good and the model will probably work for ct2.0 (fwiw, i've been subscribed to the athletic for a few years now)
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Interesting info. I will try to avoid gloating, but in another discussion on the current state of the media (where I was arguing it’s pretty dire from an earnings perspective) The Athletic was held up as a wildly successful and profitable business.
$550m is not chump change, by any means, but 5x revenue (Not to be confused with 5x earnings) is also not a huge multiplier, and if revenue is being used as the publisher multiplier it kind of infers the business isn’t earning heaps.
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