New York Times hits 10 million subscriber target with acquisition of The Athletic

The New York Times Co. hit its target of 10 million early subscriptions, the company announced Wednesday, helped substantially by the 1.2 million subscribers it added by acquiring sports news site The Athletic.

The $550 million (R$2.8 billion) deal to take control of The Athletic, announced last month, was completed on Tuesday (1st), the company announced.

In the final three months of 2021, prior to the acquisition of The Athletic, The New York Times grew its digital subscriber base by 375,000, the company said in its quarterly earnings announcement.

The new subscriptions include 171,000 for its news app, meaning the majority of new subscribers were won over by the company’s other digital offerings: the Games app, which includes crossword puzzles; the Cooking recipe app; the Wirecutter product recommendation site; and Audm, which produces audio versions of text-based journalism.

By the last week of December, The New York Times had nearly 8.8 million subscriptions. Of these, 5.9 million were for the news app, more than 2 million for other digital products, and just under 800,000 for the paper version of the newspaper.

The New York Times also announced a new goal on Wednesday: it will aim to reach the 15 million subscriber mark by the end of 2027.

A subscriber can respond for more than one subscription. The total number of subscribers indicator, which will be included in The New York Times Co.’s next earnings announcement, reflects the company’s desire to market multiple digital subscriptions and become a single point of purchase to meet not only the need for news but to other needs and amusements.

Meredith Kopit Levien, president and chief executive officer of The New York Times Co, said in a statement that company executives believe there are “at least 135 million” potential subscribers in the United States and around the world — adults who “pay or are willing to pay for one or more subscriptions to reliable English-language news, sports coverage, gaming, revenue and shopping information”.

The New York Times had set its previous goal of 10 million subscriptions by 2025 three years ago, when it had 4.3 million subscribers. With the continued growth of subscriptions to The New York Times News app and Games and Cooking apps each surpassing one million subscribers, it became apparent that the company would hit the target early.

Then, last month, The New York Times announced the acquisition of The Athletic, whose 400 journalists cover more than 200 sports teams across the US, UK and Europe, in an all-cash transaction valued at $550 million. . The New York Times Co. announced on Wednesday that the acquisition had been financed by “cash reserves,” meaning it did not borrow money to complete the deal.

In addition to completing the acquisition of The Athletic, The New York Times announced this week that it was acquiring the online gaming service Wordle, which will be added to the Games app (and will remain free, at least initially).

For the fourth quarter of 2021, the company reported adjusted operating income of US$109.3 million (R$568.3 million), up 12% from the period in 2020, and revenue of US$594.2 million, increase of 16.7%. Operating costs grew at the same pace, to US$ 500.1 million (R$ 2.6 billion). Subscription revenue rose 11.1% to US$351.2 million (R$1.8 billion).

In the year, revenue grew by 16.3%, to US$ 2.1 billion (R$ 11.6 billion), which made 2021 the first year with revenues of US$ 2 billion (R$ 10.5 billion ) for The New York Times since 2012. Operating costs rose 12.2% to $1.8 billion. Subscription revenue grew by 13.9%, to US$1.4 billion (R$7.3 billion), and the year also brought a recovery in advertising, whose revenue rose to US$497.5 million (R$2 billion). .6 bi), up 28.6% compared to 2020, although the total remains 6.2% below the advertising revenue recorded in 2019, before the pandemic.

The company announced that it anticipates an 11% to 15% increase in subscription revenues for the current quarter, which includes two months with The Athletic as part of the group. The New York Times Co. announced that it expects digital subscription revenue to rise between 23% and 28%, and ad revenue to grow between 17% and 21%. Costs will grow between 18% and 22%, according to the company.

The company’s board raised dividends by two cents per share to nine cents on the dollar and authorized a $150 million share buyback. While the repurchase will only affect Class A shares, available to the public, the dividend will affect both those shares and Class B shares, primarily controlled by the Ochs-Sulzberger family, which controls The New York Times.

Translation by Paulo Migliacci