The 5-year-old startup sports-media company The Athletic has gotten more than its fair share of press the last few years. It’s become an emblem, a totem, for a whole category of digital-media companies. So over the next few months, its current attempt to sell itself will be closely watched.
Coverage has been driven by interest in the company’s subscription-only model, its focus on hyper-local markets and its clean app-based UX. In addition, it’s achieved significant scale, with more than 1 million paid subscribers and 600 employees, many of them top reporters hired from other publications.
All these factors underlie the continued interest in The Athletic. Observers want to see validation of the model at scale. But the company has been prominently on the block for most of this year. Talks with both Axios and TheNew York Times faltered earlier this year.
Two weeks ago, The Athletic hired the boutique investment bank LionTree to help sell it. Now, the tech website The Information is s hining some light on the privately held company’s performance. It’s not great.
The company had heavy losses in each of the last three years: $54 million in 2019, $41 million in 2020, and a projected $35 million this year. Revenue for those three years was $26 million, $47 million and a projected $77 million this year. The company projects profitability by 2023.
There are important indications that subscription growth has slowed. In May, Axios reported The Athletic had 1.2 million subscribers, and some were discounted subscriptions. Yesterday’s story in The Information said the company told investors it would finish the year with 1.2 million subscribers.
The Athletic is seeking a valuation of more than $750 million.