Why $2.1 Million Was Invested In A Sports News Subscription Site

Why $2.1 Million Was Invested In A Sports News Subscription Site

Select excerpts from the Forbes

The Athletic, a new startup claims to provide “premium sports news and analysis” as its unique offering in exchange for the payment of a small monthly subscription fee.

It is a local sports team play. The Athletic is focusing on going into regional markets, hiring people that are endemic to those markets and churning out quality, fresh content. The company recently raised $2.1 million in a seed round led by a $500,000 investment from Courtside Ventures, a venture capital firm that focuses on the intersection of sports, technology and media.

About 70% of subscribers have signed up for a full year subscription up-front, per Courtside Ventures Partner Deepen Parikh . The Athletic has started small, focusing on curating content for the Chicago and Toronto markets only. Courtside Ventures will assist in launching another one-to-two new markets in the next couple of months. The largest sports markets will likely be avoided for now. Parikh also indicated that The Athletic does not need 100,000-200,000 subscribers to make it profitable. “It is not a very high bar to reach profitability,” said Parikh. “It’s different than an ad supported model.”

That is perhaps the most interesting part of this contrarian type of media company. With an advertising-supported model, a company may only be able to prosper with scale; The Athletic can carve out a profitable business by only focusing on the die-hard fans willing to part with a small parcel of their paychecks. It is focusing on content accessible on mobile devices and is referred as the “first mobile-first content platform for sports” by Parikh.

What is most compelling is that The Athletic needs a bit less than 2,000 subscribers per team per market in order to break even, according to Founder and CEO Alex Mather. He also said that The Athletic, which was launched in January 2016, has reached thousands-of-subscriptions already in both Chicago and Toronto despite only being eleven months old in Chicago and one month old in Toronto.

If Mather and his investors are correct, then it will absolutely throw the new-age journalism model, hyper-focused on page views, on its face. It will reinvigorate the potential for professional, original reporting. It will demonstrate that the ease of syndicating content and ability to access news for free may not lead to the eradication of compelling content.

Read the full article on Forbes

And learn why Craig Barberich, Zuora’s Global head of Media Solutions thinks 2016 is the Year OTT Won over Sports TV!

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