Background[edit | edit source]

  • High-flying subscription website about sports

Insights=[edit | edit source]

October 2018 investment coverage[edit | edit source]

Sports media company The Athletic swings for the fences with another $40m in funding Axios reports that 2-year-old subscription-based sports media company The Athletic just raised another $40m, co-led by Peter Thiel’s Founders Fund and Bedrock Capital.

That brings their total to $70m -- at a $200m valuation.

To put that in context, that’s twice as much as Barstool Sports’ $100m valuation, and on par with Bleacher Report’s near-$200m acquisition price by Turner media 5 years ago.

After reviewing the play… we, uh, well... According to the report, the company has 100k paying subscribers with an annual $72 subscription fee (not including discounts to sign up, etc.).

That would put their annual recurring revenue at $7.2m -- which, even at a typical SaaS software multiplier of 5x, does not a $200m valuation make, so they must have some real “hockey stick growth” in their 3-to-5-year projections.

They also have 300 full-time employees including a roster of high-profile sports journalists with their own cult followings so, needless to say, their overhead ain’t cheap.

That said, at least in the short-term, their hefty investment has earned them some highly coveted brand affinity.

When we asked our readers whether any of them subscribed to The Athletic (and why), many of them pointed to the fact that the company poached their favorite sports writers and gushed about the design of their news app.

Casey The Athletic at the bat If we know one thing about the Founders Fund, it’s that they don’t give 2 sh*ts about modest wins -- and The Athletic’s founders (also first-time media founders) likely knew they were signing up for a “go big or go home” strategy when they took the check.

The Athletic pegs its “closest competitor” as not Barstool or Bleacher Report, but ESPN’s streaming service ESPN+, which currently has 10x their paying subscribers.

Long story short, The Athletic is at bat, pointing to the outfield -- and it’s either gonna be a home run, or a big ol’ swing and a miss.

No joy in Mediaville

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