[ad_1]
. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)
Digital media start-ups Axios and The Athletic are in preliminary merger talks that could lead to the combined companies going public through a blank check or Special Purpose Acquisition Company (SPAC), according to a person familiar with the situation.
The Athletic CEO Alex Mather approached his counterpart at Axios Jim VandeHei about joining forces a week ago. Though discussions between the two companies have escalated in recent days with both parties signing a non-disclosure agreement, the talks could still be far apart, the person said. The companies see premium subscription sales to businesses as one potential area for growth.
Like other media sites, Axios and The Athletic are being squeezed in the online advertising market by Google
When it comes to online publishers, bigger, though, isn’t always better. Less than a month after acquiring HuffPost from Verizon Communications
If The Athletic and Axios were to merge, they would continue to operate their editorial operations independently though they would collaborate on making acquisitions of websites, offering premium content that attract both readers and advertisers, according to The Wall Street Journal. The paper was first to report the merger discussions which I confirmed independently.
Other media companies such as Playboy Enterprises and DraftKings went public via the SPAC route, which is cheaper and can be processed faster by regulators than an Initial Public Offering (IPO).
Launched in 2017, Axios publishes short newsy articles, newsletters, and podcasts on various political and economic topics along with human interests topics such as sports and science. The company also is expanding to local markets such a Charlotte, home to the digital start-up The Charlotte Agenda, it acquired in December 2020 for a reported $5 million.
The Agenda focuses on service journalism in North Carolina’s largest city, chronicling the city’s homeless population’s rise, on its website, newsletter, and its social media accounts.
Axios is profitable and has gained the respect of its peers after numerous scoops on the Trump administration including the former president’s plans to pardon former National Security Advisor Michael Flynn and to falsely blame left-wing Antifa activists for the January 6 insurrection at the Capitol in Washington. D.C.
According to Crunchbase, Axios has raised $57 million from 10 investors, including Glade Brook Capital Partners, Atlantic Media owners David G. and Katherine Bradley, and NBC News. As of November 2019, Axios’s valuation was estimated at between $100 million and $500 million, Crunchbase says.
Axios was on track to earn $61 million in revenue in 2020, according to The New York Times
Axios and The Athletic both declined to comment for this story though they both admitted that they were fans of each other’s work.
“We have talked for literally years about our shared passion for premium content businesses.” VandeHei Tweeted in a statement to CNN. “That said, we would never comment on private discussions about possible partnerships or deals.’’
Taylor Patterson, a spokeswoman for The Athletic, echoed VandeHei’s sentiments in an email statement.
“Axios has built an incredible business and we have enjoyed many conversations over the years,” Patterson wrote, adding that the company also doesn’t comment on “rumors and speculation.”
The Athletic, which has signed-up marquee sportswriters including Hall of Fame baseball scribe Jayson Stark, was founded in 2015. It charges readers $7.99 a month to access its content which includes coverage of local college and professional sports teams. The company has said it has more than one million paying subscribers.
According to Cruchbase, The Athletic has raised $139.5 million from investors, including Courtside Ventures, Bedrock Capital, and Founders Fund. Investors valued the company at between $500 million and $1 billion as of January 23, 2020, Crunchbase says.
[ad_2]