The Athletic Hammers the New York Times

It is a real sign of weakness. The initial subscription offer for The Athletic, recently purchased by the New York Times Company, is $1.99 monthly ($0.50 a week in another offer). That puts it in a class with USA Today and weak metropolitan newspapers, which often charge $1 monthly to draw new customers. It signals that The Athletic has run through the core potential customers who want to read its stories. And it is an ugly sign for The Athletic’s future. The New York Times overpaid when it shelled out $550 million to buy it just over a year ago. The path to profitability for The Athletic is narrow. (The best countries for press freedom.)
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According to the most recent New York Times quarterly earnings statement, The Athletic’s revenue was less than modest at $29.9 million. It lost $6.9 million. The figures for the full year were just as difficult. On revenue of $85.7 million, it lost $35.9 million. The report said the fourth quarter loss was “largely from cost of revenue, which is primarily related to journalism costs.” If revenue does not surge by 25% or more, layoffs are probably the only way for The Athletic to be profitable. It is also hard to know what costs the New York Times attributes to The Athletic, which could worsen the figures.
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The Athletic management claims a newsroom of 450+ full-time people. The New York Times figure is about 2,600. This shows how absurdly overstaffed The Athletic is.
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How much does The Athletic have to make a year to justify the investment the New York Times made? It depends on how many years are used to make the computation. Certainly, the figure is over $30 million and may be as high as $55 million. That will never happen.