The sports startup wants to “zig when everyone else is zagging,” CEO Alex Mather says
The Athletic doesn’t want to slow down.
The ad-free hyper-local subscription sports website just crossed the 500,000 subscriber mark three years after its launch and has plans to double that figure by the start of 2020. (The New York Times, for comparison, leads the market with 4.7 million digital and print subscribers.)
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It’s an ambitious goal. But it’s also fitting for a company asking sports fans to pay a premium for coverage of their favorite teams at a time when there’s plenty of competition for commodity game coverage from local newspapers and sports content startups, such as Bleacher Report.
CEO/Co-Founder Alex Mather said The Athletic, based in San Francisco, looks at itself as a tech company that’s “laser-focused” on subscriber growth. To accomplish that, he said, providing quality over quantity is essential — giving readers in-depth analysis and player profiles they won’t find elsewhere in a saturated sports journalism market.
“For us, it comes down to a really simple business model,” Mather said. “We hire just enough people, we pay them really well, we treat them really well, we give them all the tools to do the best work of their career, and everything they do is focused on making our subscribers happy.”
The Athletic is now looking to keep soccer fans happy — and wrangle new subscribers — after it just expanded into the U.K. with its coverage of the English Premier League.
So far, “about 80-85%” of The Athletic’s first-year customers renew their subscriptions for a second year, Mather said.
Some other numbers to keep in mind: The Athletic has raised nearly $90 million, according to Crunchbase. Mather said average revenue per user is $64, which comes out to about $32 million per year in sales at its current subscriber base.
The company’s headcount has grown to “about” 400 editorial employees, and is “closing in” on 500 people, Mather said. Overall, The Athletic covers 280 pro teams in more than 50 markets across the U.S., Canada and U.K.
And unlike some Silicon Valley startups, The Athletic is “obsessed” with becoming profitable, Mather added.
TheWrap recently spoke with Mather at length about The Athletic’s strategy and plans for the future.
Let’s start with the genesis of the company. What were you trying to accomplish?
I’m from Philadelphia and my co-founder [Adam Hansmann] is from Cincinnati, and the need for us was pretty clear. Our local teams — whether it be the Bengals, the Eagles, the Sixers, [or] the Reds — they felt undercovered by most of the national outlets. And as younger folks, we weren’t really interested in the standard fare from the local newspapers.
We felt there was an opening there to do some of the cool things you’d see at FiveThirtyEight, Grantland or The Ringer and apply it to local teams. What it would look like to do more analytics, deeper profiles, and taking a more national newspaper or a modern media company’s approach to local sportswriting.
You’ve hired some well-known newspaper reporters, people like Tim Kawakami, who has covered the NBA for decades in the Bay Area. What are writers like him doing differently from their time at newspapers?
It was probably the first big question we had as founders: how flexible are these folks coming from newspapers?
They had done pretty much the same thing for decades. So right away, we learned with Tim Kawakami in the Bay Area and others, just across the board how intellectually curious they were in terms of trying new things. Most of the writers we hired just wanted to do great work. What that meant varied from writer to writer, but they wanted the support of their company, editors and management to try new things. To zig when everyone else is zagging.
We gave them the room to do that, without necessarily a specific formula.
So what works for Tim Kawakami absolutely is not the same thing as [NBA reporter] Shams Charania, and that’s really important to our business. In fact, what works for Tim Kawakami might be very different than what works for [NBA reporter] Marcus Thompson in the same market. We’ve just said let’s accentuate the strengths of each writer and give them the tools to do the best work of their careers. And we were just blown away at how receptive and flexible and adaptive these folks were.
At this time last year, you were at 100,000 subscribers. You just passed 500,000 subscribers this summer. That’s a 400% increase in a year. What was behind that exponential growth?
It’s a couple things. First of all, it’s just expanding geographically. So as we sort of marched from market-to-market, city-to-city, team-to-team, adding places like Virginia Tech, Seattle — big cities and college towns that people weren’t necessarily covering deeply. Geographic expansion was absolutely job number one for us.
The second thing is we have built a really great growth marketing scheme. We love to try to find new ways to act like a tech company in many ways, in terms of growing the top of the funnel for the business. Finding subscribers out there in the world and bringing them to us as quickly as possible.
You want to hit 1 million subscribers by the end of the year. How are you going to get there?
We’re pretty much set on the geographic expansion for the time being. We continue to add talent when we find great talent, and that’s just an ongoing process for the company. That might be in some markets or sports that are in off-seasons.
The primary thing is we’re, for the first time, covering the world’s biggest sport in soccer. That just has a global audience, and you bundle that with the excellent coverage of pro [sports] and college in the U.S. and pro in Canada. You have a really powerful bundle that we think subscribers all over the world want, so now it’s our chance to go get them.
The Athletic is doubling down on local content at a time local newspapers have been struggling. Why do you think local news is a good bet to make?
We’re pretty lean. We don’t have ambition around other things in these local markets. We’re not printing. We’re not covering restaurants or local politics. We’re absolutely focused on sports and trying to do it in a modern way, and we found there’s absolutely an audience for this.
There’s absolutely no shortage of sports content out there, but most of it tends to be the same variety of people rewriting other people’s work. We found when we do unique stories, when we go the extra mile and tell something that’s really compelling, subscribers love it.
Your site champions itself as “the new standard of sports journalism.” What sets it apart? Why would a Lakers fan, for example, want to read Bill Oram, rather than wait for it come out elsewhere?
You’re capturing the challenge of the business, which is, how do we truly differentiate?
There are a few ways. Number one is access. A lot of these outlets don’t have the access we have. Whether it be Bill working with Shams on a story — that’s really unique. The combined access of our entire team has really opened doors for us.
Number two, we generally hire really respected journalists. At a time when there’s no shortage of opinions on the internet, folks are really looking for opinions from authoritative figures in journalism, folks who perhaps earned the right to give an opinion over years and years of hard work.
And number three, for us — and I probably buried the lead — is storytelling. How many outlets are really focusing — it might be in their employee handbook or in their editorial guidelines — but gosh, we live up to that by constantly striving to tell more and more stories — and stories behind the stories. The oral histories, the deep profiles. The things that unearth Kawhi Leonard and “Board Man Gets Paid.” [A recent profile of the ex-Toronto Raptors swingman highlighted quirky phrases and characteristics of Leonard during his college days, to NBA Twitter’s delight.]
Who else is going to do that at the scale at which we’re doing that? Very few outlets, and we think that’s one of the unique selling points for many subscribers.
Why is it important to be ad-free?
For us, it really just comes down to incentives. We’re a really simple business. All of our folks at HQ, all of our writers, are laser-focused on making our subscribers happy. There isn’t some other party we’re thinking about. That focus is really underrated, it keeps the company grounded in its actions.
What that means is we learn and iterate quickly, based on what we see works and what we see subscribers are reading and saying to us. And being as transparent as possible with our journalists in letting them see all this data.
Do you have an example of how data has informed editorial decisions?
I don’t have a specific writer in mind, but a lot of writers, especially NFL writers, are used to pretty deep dives on a preview of a game. It’s a commonplace piece of content that a lot of outlets do. And we just see in the data that a lot of subscribers just don’t really consume it.
They’re more interested in the prediction [laughs]. That’s a simple version of something, where the data continues to show that kind of story just doesn’t really perform that well.
There’s this constant tension when writers come from places where they produced a lot of content, they may have produced 1-3 stories a day, and we’re asking them to produce 3-4 stories per week.
There really isn’t that huge connection with massive amounts of quantity and the metrics we’re trying to achieve, which are engagement and subscribers. They see pretty quickly in the data pretty quickly where their sweet spots are.
Another example, perhaps, that is positive: We have [NBA reporter] Anthony Slater, who does his 5 observations after Warriors games. And in many cases, game stories don’t necessarily perform that well because they’re a [common] feature out there. But Anthony finds a way to be incredibly unique in his observations, and they’ve become a must-read for folks who follow the Warriors.
Bloomberg reported last month that The Athletic’s average revenue per user was $64. Can you explain?
Most of our subscribers are paying for annual [subscriptions], but we have many subscribers paying for monthly.
The monthly subscribers are paying a higher rate and they end up pulling up that average revenue per user, because it is $10 per month. The second point I’d make is most of our users have paid for their second year. [Annual subscriptions are $48 for a customer’s first year, and increase to $60 per year afterwards.] The discount is only for the first year. It just averages out based on those two things.
You mentioned approaching The Athletic as a “tech company.” Most tech companies are typically fixated on subscriber and revenue growth, rather than generating a profit. How does the business become profitable?
That’s a dynamic question that doesn’t really have a clear answer. There are a couple ways we think about our business, and of course we’re thinking about top line growth. How can we continue to be a bigger company and reach more subscribers across the world.
But so much of our efforts are thinking about [growth]. We’re thinking about Philadelphia as a market or the Bay Area or LA as a market. How are the unit economics of those markets? How many subscribers does it take to support the 10 journalists and travel and the freelancers and editing to make that break even?
It’s very similar to some of these other businesses you see from go from local market to local market — whether it be a DoorDash or Uber. There’s an obsession over each market to get profitable. And I would say perhaps where we differ a little bit from those bigger companies, is we do obsess on the ground with getting these huge markets profitable. And when it gets close to profitable, we’ll often invest more into talent.
So if LA continues to grow, we’ll add more people in LA. And that just helps us continue to grow. The venture capital continues to let us spend ahead of subscriptions.