The New York Times to buy sports news site The Athletic for $767m

The iconic US newspaper has struck a deal to buy sports website The Athletic, as it embarks on a digital subscriber push to offset falls in its print readership.

The New York Times will buy sports news website, The Athletic, as the company embarks on a subscriber push. Picture: ANGELA WEISS/AFP.

The New York Times has acquired sports news publisher The Athletic as the newspaper moves to diversify its subscriber base in a fast-growing sector.

The 170-year-old publisher will pay $US550m ($A767m) for The Athletic, which was founded in 2016 and had 1.2 million subscribers in December.

It follows a similar move by News Corp Australia, publisher of The Australian, which established a subscription sports journalism website, CODE, in November.

CODE combines reporting from specialist sports reporters with perspectives from some of the country’s highest-profile athletes, coaches and commentators.

Due to be completed this quarter, the deal is one of The New York Times’s largest-ever acquisitions. The company spent $US1.1bn on the Boston Globe in 1993 and $410m for About.com in 2005. Both were later offloaded for lower amounts.

Investors appeared to approve the transaction with shares in the media company higher by 4.7 per cent on Thursday to $US47.82.

The Athletic deal cements The New York Times’ push towards a subscription-first model, common across the media industry as publishers look to monetise digital audiences.

In the past three years the company said it had doubled its consumer subscription business to 8 million paid subscribers across its digital and print products.

The New York Times president Meredith Kopit Levien said The Athletic sale would expand its market base and help it achieve a goal of 10 million paid subscribers.

“We’ll have a more robust offering to engage the millions of subscribers we already have and convert many more new ones among our 100 million-plus registered users,” she said.

“Ultimately, The Athletic helps further our vision of making The New York Times the essential subscription for every person seeking to understand and engage with the world.”

The Athletic is currently expected to be immediately accretive to The New York Times’s

revenue growth rate. The company expected the acquisition would be dilutive to its operating profits for the next three years as it scales subscriptions and builds an advertising business, and accretive thereafter.

The Athletic will operate as a separate unit of the company and its founders, Alex Mather and Adam Hansmann, will stay on with The New York Times after the acquisition.

Reuters reports The Athletic brought in $US47m in revenue in 2020 after it was forced to cut staff and pay during the early months of the pandemic when most sporting codes were suspended. It said the company projected last year 2021 revenue of $US77m, with cash burn at $US35m million. The Athletic provides national and local coverage of more than 200 clubs and teams in the US and around the world.