Nieman Foundation at Harvard
I suppose it’s okay to have something else to remember January 6 for. That was the day that The New York Times Co. pulled out its wallet, peeled off $550 million in $20s, and — after months of will-they-won’t-they — bought The Athletic.
Congratulations to both sides of the deal. For the Times, how much pleasure must there be in reading old (but not that old) takes arguing the Old Gray Lady would soon breathe her last? Instead, it’s built a world-class subscription engine that throws off enough sparks that they can drop half a billion on something and pay in cash.
And for The Athletic, they’ve proven out part of its original thesis: that you could create a high-quality national sports product that, even in such an overcrowded space, gets more than a million people to pay for ir. The web has spawned a zillion sites that cover sports from coast to coast, but they’ve almost always been free to read, funded by ads. The Athletic thought The National was just 30 years too early to build a big paying audience, and they were right.
(That that last link is to a Grantland oral history of The National is a reminder of how unforgiving certain corners of the sports media market can be.)
The part of The Athletic’s thesis that still awaits its Andrew Wiles is: …and you can be profitable doing it. The Times — with its subscription prowess, its huge marketing platform, and its plug-and-play ad system — has as good a chance as anyone to figure that one out.
But this team-up has re-raised questions about The Athletic’s impact on local newspapers. Back in 2017, one of its co-founders famously let these words come out of his mouth in front of a reporter:
We will wait every local paper out and let them continuously bleed until we are the last ones standing.
We will suck them dry of their best talent at every moment.
We will make business extremely difficult for them.
Which were very jerky things to say! And, maybe worse, saying it in front of a reporter solidified the impression that these upstarts saw an industry to be fleeced more than an audience to serve.
Hmmm. I subscribed to a humble startup that I was rooting for. Perhaps, before being poached, I’ll cancel my subscription. https://t.co/PuFEDsg27Y
— Barry Svrluga (@barrysvrluga) October 23, 2017
Damn, The Athletic pivoted to evil
— max (@MaxOnTwitter) October 23, 2017
Silicon Valley founder nerds talk like Marvel villains. “Hear now: we offer no quarter. Expect none.” Okay man, good luck with your website.
— David Roth (@david_j_roth) October 23, 2017
And now, combining that attitude (which The Athletic immediately regretted voicing) with the Times’ reach and power is resurfacing many of those worries. Here’s the always perceptive Aron Pilhofer, for instance:
It turns out, The New York Times does really care about local news — just not in the way we thought. By purchasing The Athletic, which covers 270-plus sports teams in more than 47 local markets, The Times has placed itself in direct competition with every local news site for the same pool of subscribers. And since the average number of news sites people will pay for is one, that is very bad news indeed for local legacy news organizations.Newspaper execs will say The Times has been competing with them for decades, which is true. But The Times has never competed as directly in a domain (local sports) that, until now, was largely owned by local news.
Sports is among the last vestiges of the regional monopolies local newspapers enjoyed before the internet era. Granted, sports isn’t the only reason people subscribe to a local newspaper, but it is one of them. It is also one of the topics local newspapers traditionally do well. Passionate fans can name their favorite columnists, their favorite writers. Those are the folks The Athletic was courting when it launched in 2016.
You can bet those newspaper execs slept not a wink last night imagining their hard-won subscribers receiving solicitations for a future bundle that includes the nation’s best news site, Cooking, Games, Wirecutter, and all the local sports coverage anyone could ever want.
At the risk of being proven wrong (and Aron laughing at me at some future post-Covid gathering): I’m not as worried about the impact this will have on local newspapers. I think those newspaper execs can probably go back to sleep. (Or, perhaps more accurately, there are lots of other things that should be giving them more nightmares.) Here are a few reasons why.
Let’s get this out of the way first. The Athletic did, in fact, hire a lot of talent away from newspapers. Some of them were big names famous in their markets; others were the younger reporters stuck behind those bigger names in the newsroom hierarchy — the journalism equivalent of talented adjuncts bitter toward the full profs who somehow lucked into an endowed chair.
But the market for sports reporting is strange; there are always more people who could be capable sports reporters than there are jobs to employ them. So as a profession, it can take a little, er, “pillaging” without too severe a talent drop-off.
(It is, in other words, precisely the opposite of NFL quarterbacks.)
It is often said that, as Aron puts it, “the average number of news sites people will pay for is one.”
First off — how great would it be if the average American actually had one digital news subscription? In reality, the median number of news sites people will pay for is a big fat zero.
Second, not all digital subscriptions compete directly with one another — and those that do don’t all compete in the same way.
I mean, there’s a zero-sum sense in which people only have so much total money to spend, and all digital subscriptions “compete” for those dollars in the same way that McGriddles, parking tickets, HBO Max, and rent are all constrained by a common overall budget. But most digital media subscriptions aren’t as interchangeable as, say, print newspapers used to be in a two-newspaper town.
Take a market that’s hits-driven — streaming services. There, multiple subs can be the norm. 92% of Apple TV+ subscribers also get Netflix, as do 90% of HBO Max subscribers, 87% of Disney+’s, 85% of Hulu’s, and 84% of Amazon Prime Video’s. Now, Netflix is obviously the big game in town, but there’s plenty of overlap elsewhere too. (Of Hulu subscribers, 79% get Amazon, 68% get Disney+, 38% get Apple TV+, and 32% get HBO Max.) It makes sense: Netflix might be your go-to evening watch, but a lot of people will be happy to pay a bit more not to miss “Ted Lasso,” “Succession,” “The Mandalorian,” or “The Handmaid’s Tale.” The average American household pays for four streaming services.
But look at a different kind of market: streaming music. Apple Music and Spotify will each give you access to pretty much all the music you need. There’s very little reason to have a subscription to both; witness Spotify’s attempts to differentiate itself through having its own exclusive horse-paste enthusiasts.
Now, to be blindingly obvious, digital news is not like either streaming video or streaming music as a market. For one thing, a larger share of high-quality news is available for free than the share of, oh, high-quality dramas about Waystar RoyCo. Individual news stories are shared socially, of course, but they rarely become must-consume cultural touchstones in the way a TV series can. And the total time most people spend seeking entertainment from a flatscreen dwarfs the total time they spend looking for news.
For streaming music, a subscription gets you access to (practically) all music. You could buy a dozen digital news subscriptions and there’d still be thousands of paywalls all over your Twitter feed.
But it’s also true that different outlets compete on different playing fields. The Washington Post and The New York Times? Definitely direct competitors. The New York Times and, say, Slate? Yes, competitors — they cover broadly similar topics — but it’s unlikely someone who subscribes to one would cancel the day they started paying for the other. They’re differentiated in tone and editorial approach; one aims to be comprehensive while the other picks its spots; one puts a huge amount of its subscription value on podcasts, the other almost none.1
The Atlantic and The New Yorker? Definitely direct competitors. The Atlantic and Wired? Yeah, there’s some overlap there, but not one-for-one. Wired and Vogue? Very little.
Axios and Politico? Definitely direct competitors. Axios and The Skimm? They’re both free email newsletters that aim to bullet-point the news for busy people — but their subject matter, tone, and relative tether to the news cycle make them quite different.
There’s a big difference between products that might be competitive and those that might be substitutable. I think a sports product like The Athletic and a local newspaper are distinct enough that, for consumers, they’re pretty weak as substitutable goods.
Has The Athletic wrecked the digital subscription business of local newspapers? Not really. And, to be honest, neither has the Times.
Digital subs for local newspapers are way up from The Athletic’s threatened continuous bleeding. In 2017, Gannett had 341,000 digital subscribers; in 2019, it had 712,000; today, it has 1.5 million, up 46% year-over-year. Less than two years ago, the smaller chain Lee was psyched to announce it had 100,000 digital subscribers; last month, it said it had passed 400,000.
Now, would those numbers have been, say, 5% higher if The Athletic had never come along? Maybe — but I doubt it’s actually made much of a dent. The markets for “local news and information” and “national sports teams, some of which are based nearish my house” overlap less than you might think. And the same is true for the Times: All of that local digital sub growth has come at the same time that Times subscriptions have been rocketing up too.
There’s no question: The Times has been wildly more successful than your local daily at signing up digital subscribers. But why? I think there are two ways to look at it — and one, derived from the days of print, can lead people astray.
Thought 1: “The New York Times and the Townsburg Daily Gazette are both newspapers. They both assemble similar bundles of information — news, opinion, sports, arts, food — and compete for the audience’s attention and dollars.”
Thought 2: “The New York Times and the Townsburg Daily Gazette are fundamentally different products. One of them is all about national and global news, politics, culture, business, and discovering that monocles are a trend. The other is all about this community, Townsburg — what’s the mayor’s up to, why’d that restaurant close, what’s that construction project on 4th Street, is Townsburg High’s football team any good this year? Both of them produce “news,” broadly defined, and they both have tremendous value. But there’s rarely a story in the Gazette where I wonder, “Huh, I wonder what The New York Times says about this” — and almost never a Times story I expect the Gazette to be competing on.”
I think the misconception is that the Times and your local daily are making the same thing, just at different levels of quality and with different levels of resources. They’re not. In the print days — when huge swaths of newsprint were given over to national and international news, wire sports and agate, syndicated columnists and national ads — there was an argument for that view. But not in a digital world.
Finally, I think it’s a misconception that The Athletic is offering “local sports.” The Athletic covers national sports leagues, professional and quasi-professional, which happen to have teams in large metropolitan areas around the country. An NFL game will be more interesting to people who live in the urban conglomerations that the teams call home — but it’s in no way only interesting to them.
Is The Athletic a competitor to, say, the Atlanta Journal-Constitution for Falcons news? Sure.2 But it’s hardly the first. ESPN, Fox Sports, Yahoo Sports, SI, Bleacher Report, SB Nation, CBS Sports, NBC Sports, Defector, the corpse of Deadspin, wire stories, Twitter, the Falcons itself, Matty Ice’s sparkling Facebook presence — there’s a ton of competition.
What have been the three biggest drivers of interest in those national sports leagues over the past decade? Social media, fantasy sports, and gambling. Social is all about individuals — players and reporters tweeting cryptic diss tracks and free agent scoops. Fantasy is also about individuals — all the players league-wide, not just your local team’s mediocre tight end. And if you let your personal fandoms drive your gambling habit, well, you won’t be a very good gambler. All three of these forces push fan attention away from your local team and up toward the league and its array of personalities.
(It’s also worth noting here that of the 1,200-plus daily newspapers in America, the vast majority of them don’t cover a single team that The Athletic does. We’re really talking about 40 or 50 metro papers here.)
“Local sports” isn’t the Lakers or the Yankees, from a local publisher’s perspective. That’s a slice of national sports that’s been deposited in your region, and the competition over it is already fierce. If someone is really buying the L.A. Times only for its Lakers coverage, well, they likely weren’t going to stick around for very long anyway. There’s just too much competition, the vast majority of it free.
And not to harsh on The Athletic too much — but their output makes it clear that their editorial ambitions for deep-market coverage are…constrained.
I root for the Louisiana Ragin’ Cajuns, who had a very good football team this year. They went 13-1, won a bowl game, and finished the season ranked No. 16 in the nation. I follow The Athletic’s coverage of the Cajuns — want to guess how many stories they actually wrote about the team this year? Two.
I also root for the New Orleans Saints, who had a super-dramatic finish to their season on Sunday afternoon. How many Saints stories has The Athletic run in the nearly 48 hours since? One. It’s a good story! But the hometown paper, The Times-Picayune, has run 10 in the same time.
“Local sports” is high school football, the volleyball star getting all the D-1 offers, the D-III college that no one else covers. The Athletic is never going to touch that. It’s not as sexy as the big leagues — just as covering city hall isn’t as sexy as covering the White House, and covering the logistics company that’s your region’s largest employer isn’t as sexy as covering Google or Apple.
But that’s just…reality. The Townsburg Daily Gazette isn’t going to win by putting reporters on Joe Biden and Tim Cook full time — a newsroom should stick to what it can do best. For a local newspaper and The New York Times, there’s almost no overlap between those two “bests” — even with The Athletic aboard.
