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Mass v Premium in Journalism

The New York Times recently acquired The Athletic for a whopping 550 million USD in cash. The Times is one of the most venerated names in American news, at least in certain circles. The Athletic, however, is a relative newcomer to the journalism field with a focus on sports. Founded in 2016, The Athletic has always aimed to provide “smarter coverage for die-hard fans”, and over the past half-decade, they have done just that. So, how did a newcomer establish 550 million USD in value in roughly 5 years? They became the first and only premium supplier of sports journalism in the United States, and they did it by strictly enforcing notions exclusivity and quality.

First, The Athletic chose to reject the traditional ad-supported journalism model, which has struggled in recent years. Instead, they opted for a subscription-only model. But as many news outlets have learned (and learned the hard way) over the past couple of decades, subscriptions are very hard to come by; people will only buy paid subscriptions if there is a truly unique product behind it, something they cannot get anywhere else for free. That is why strict paywalls have had mixed success, and very few news outlets have been able to successfully implement them. That is, many companies have attempted to become premium suppliers, but they lacked the quality to differentiate themselves from mass suppliers. That is where The Athletic’s second unique feature comes in: they truly do cater to die-hard fans; that tagline is not just lip service. These die-hard fans are the premium consumers of the sports journalism market, and they are willing to pay if the product delivered to them is worth it. Catering to this segment means getting the best, brightest, and most well-connected sports journalists to join the team, and that’s exactly what The Athletic did. The company’s founders had the correct belief that sports fans would be willing to pay for top-notch reporting and articles as long as they came in the form of a clean app and website with no ads.

Scalable Quality

The Athletic launched in Chicago, and to ensure top-notch reporting, they had dedicated reporters for each of Chicago’s major sports teams. Importantly, these reporters were (and still are) well-connected with the organisations they are paid to cover, meaning they have consistently gained increased access to the organisation, obtained scoops faster than anybody else, and have been able to dive much deeper into the nuances of each organisation. Importantly, this type of niche, premium reporting model was highly replicable for every major sports franchise across the country, each with its own pocket of die-hard fans that want to read tailored reporting.

As The Athletic expanded across the country, they repeated this model in every major city across the United States. Along the way, they added high-profile, well-connected journalists to their roster. Eventually, their scope expanded to cover North American sports at the national level. Premium consumers like to feel that they are part of an elite club, and The Athletic provided that feeling, even at the national level. When there is a big, breaking story in the world of the NBA, the first person reporting it is likely Shams Charania. The players trust him, so they share their news with him first. If something big is about to happen in the world of college football, everybody is waiting for Stewart Mandel’s take. Unlike the bombastic talking heads that report the news at ESPN – the mass-market, Disney-owned network — The Athletic’s analysts are true experts who care deeply about their sport.

Reputation & Quality

Sports is always big business, but The Times’ decision to purchase The Athletic has proven that quality still matters. The Times went through with the acquisition because of The Athletic’s 1.2 million subscribers. For comparison’s sake, The Times itself has 8 million subscribers. The Washington Post, the largest politics-oriented news outlet in the US, has roughly 4 million subscribers. Both newspapers were founded in the mid-1800s. Thus, a relative infant in the industry was able to gain massive ground because they focussed on cultivating an image of quality, integrity, and depth. So, when analysts say that The Times was really just buying The Athletic’s subscriber base, they are not wrong. But they were also buying their reputation, and for such massive organisations, a strong reputation can be worth well more than half a billion USD.