(Reuters) -The New York Times Co said on Thursday it has agreed to buy subscription-based sports site the Athletic for $550 million in cash, as the 170-year-old newspaper adds more digital content to grab subscribers.
Founded in 2016, the Athletic had 1.2 million subscribers as of December, and covers more than 200 clubs and teams in the United States and around the world.
“Acquiring the Athletic puts us in a position to be a global leader in sports journalism,” said NYT Chief Executive Officer Meredith Kopit Levien.
The deal shows NYT’s push towards a subscription-first model, which has become a growing trend across the media industry, as the newspaper struggles with steep declines in advertising and print readership.
In the last three years, the company said it has added over eight million paid subscriptions across digital and print products.
“We are now in pursuit of a goal meaningfully larger than 10 million subscriptions and believe the Athletic will enable us to expand our addressable market of potential subscribers,” Levien added.
The deal is expected to immediately add to the newspaper’s revenue growth and be dilutive to its operating profit for about three years.
The Athletic will operate as a separate unit of the company and its founders, Alex Mather and Adam Hansmann, will stay on with the NYT after the acquisition.
Allen & Company advised the NYT on the deal, while The Athletic was advised by LionTree Advisors.
The Information first reported the deal on Thursday. Shares of NYT closed up 4.7% at $47.82.
(Reporting by Chavi Mehta in Bengaluru; Editing by Arun Koyyur, Devika Syamnath and Shailesh Kuber)
