NYT reaches goal of 10 million subscriptions and closes The Athletic
The New York Times Company hit its goal of 10 million subscriptions ahead of schedule, the company said Wednesday, helped in large part by the 1.2 million it gained from buying sports news site The Athletic.
The $550 million deal for The Athletic, which was announced last month, closed on Tuesday, the company said.
In the last three months of 2021, before the Athletic acquisition, The Times added 375,000 digital subscriptions, the company said in its quarterly earnings report. These additions included 171,000 to its main information product, meaning the majority were for the Times’ other digital offerings: Games, which includes crossword puzzles; Kitchen, its recipe app; Wirecutter, its product recommendation site; and Audm, which produces audio versions of text journalism.
In the last week of December, The Times had nearly 8.8 million subscriptions. Nearly 5.9 million were for digital news, more than two million for other digital products and just under 800,000 for the print newspaper.
The Times also announced a new target on Wednesday: It will, it says, aim to have at least 15 million subscribers by the end of 2027.
A subscriber may represent more than one subscription. The subscriber metric, which will be included in the upcoming Times earnings report, reflects the company’s drive to market a bundle of multiple digital subscriptions as a one-stop shop for not just news, but other diversions and needs. At the end of last year, the company said, The Times had about 7.6 million paying subscribers for 8.8 million subscriptions.
Meredith Kopit Levien, the company’s president and chief executive, said in a statement that Times executives believe there are “at least 135 million” potential subscribers in the United States and around the world – adults “paying or willing to pay for one or more of the English-language news subscriptions, sports reports, puzzles, recipes or expert shopping tips.”
The Times set its original goal of 10 million subscriptions by 2025 three years ago when it had 4.3 million. As subscriptions to The Times’ core digital news app continued to grow, and Games and Cooking each racked up more than a million subscriptions, it became clear that the company would exceed the target quickly.
Then, last month, The Times announced it would buy The Athletic, whose 400 journalists cover more than 200 sports teams in the United States and Europe, in a cash deal worth $550. millions of dollars. The Times said on Wednesday that the deal was financed with “cash on hand”, meaning without borrowing any money.
As well as closing The Athletic, The Times said this week that it is acquiring viral online puzzler 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 $109.3 million, a 12% increase over the prior year, and revenue of $594.2 million. , an increase of 16.7%. Operating expenses increased at almost the same rate, to $500.1 million. Subscription revenue increased approximately 11% to $351.2 million.
For the year, revenue rose 16.3% to $2.1 billion, making 2021 the Times’ first $2 billion year since 2012. Operating costs rose 12.2 %, to $1.8 billion. While subscription revenue grew 13.9% to $1.4 billion, the year also saw a rebound for advertising, where revenue reached $497.5 million, a 26.8% increase compared to 2020, but still 6.2% less than before the pandemic, in 2019.
The company said it expects subscription revenue to grow 11-15% in the current quarter, which includes two months with The Athletic as part of the company. The Times added that it expects digital subscription revenue to increase 23-28% and advertising revenue to increase 17-21%. Costs will increase by 18-22%, the company said.
The company’s board increased the dividend by 2 cents per share, to 9 cents, and authorized a $150 million share buyback, the company said. While the buyback will only affect Class A shares, which are available to the public, the dividend will apply to both those shares and Class B shares, which are primarily owned by the Ochs-Sulzberger family which controls the Times.