Fast-growing startup aims to ‘replace the sports page’

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Alex Mather has what he calls, with a touch of understatement, “pretty big goals” for his subscription-based sports news startup, The Athletic. “The best case is that we can really catch on,” he says, “and we can replace the sports page in every single city on the continent.”

Mather and his cofounder, Adam Hansmann, took a step in that direction in September with the debut of another round of new sites, including The Athletic Canada, which put The Athletic in all seven Canadian cities with NHL teams, and The Athletic Philadelphia. Twenty months after it launched its first site in Chicago, The Athletic has sites in 15 professional sports cities in the US and Canada, plus a national site for college football and another on the way for college basketball.

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The North American continent is littered with sports news sites, many of them focused on a single team or geographic area and networked with others (ala Bleacher Report and SB Nation). The Athletic is different in a few ways. The first and most obvious is the paywall: Subscriptions to the entire network sell for $8 per month or $48 per year, and almost every article The Athletic publishes is subscriber-only. There are no ads of any kind, and the founders say there will never be banner ads, pop-up ads, autoplay video ads, or anything of the sort.

The Athletic is different from most sports sites in its ambition, both journalistic and as a business. The company is backed by $7.7 million in venture capital, the most recent a $5.4 million investment in July, and more is on the way, Mather says. By early September, The Athletic had about 60 total employees. If it reaches its goal of covering every professional and major college sports team in North America, it could eventually approach 1,000 employees, Mather says.

Co-founders Alex Mather and Adam Hansmann. Courtesy photo.

One of the ideas behind The Athletic is that people don’t like ads and do like good writing and reporting. Another is that people will pay for deep coverage of topics they’re deeply interested in. A third is less obvious, but perhaps equally important: Sports fans would rather buy a product that bundles together sports coverage than one that bundles their local sports with local politics, weather, school news, and the rest of the traditional newspaper package.

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The Athletic’s sites—contrary to similar efforts at independent online sports coverage, which have typically plumbed each team’s fan base for fanatic followers willing to write for peanuts—have launched with splashy hires, either national names or reporters and columnists with some measure of local fame. Among them:

  • Paul Fichtenbaum, a former Sports Illustrated editor in chief, is The Athletic’s chief content officer and is developing a vertical devoted to features, investigations, and other longform writing.
  • Phil Taylor a former Sports Illustrated columnist, is a contributor writer to The Athletic.
  • James Mirtle, a former hockey reporter with The Globe and Mail, runs the The Athletic’s Canadian sites.
  • Ken Rosenthal, a national baseball writer and television presence, was hired in August to run The Athletic’s national baseball site.
  • Seth Davis, a college basketball reporter recently laid off from Sports Illustrated, will run The Athletic’s college basketball site, The Fieldhouse.
  • Stewart Mandel, formerly with Fox Sports, runs the college football site, The All-American.
  • Tim Kawakami, one of the top sports columnists in the San Francisco Bay Area, left the Mercury News in July to run The Athletic’s new Bay Area site. He brought along Marcus Thompson, another columnist for the Mercury News and the East Bay Times, which together make up Bay Area News Group, a Digital First Media subsidiary. The other inaugural hires were sportswriters and editors from Bay Area News Group and the Hearst-owned San Francisco Chronicle.

Though The Athletic’s corporate office is in San Francisco, it took a year and a half to start a sports news site for the Bay Area. The site has been The Athletic’s biggest launch so far, and it could serve as a blueprint for the company’s entry into other huge media markets.

The first step was to hire a big name in local sports media as the editor. “We want to hire the stars in their markets,” Fichtenbaum says. “We know those people have followings, and we want to tap into those followings. If we have the No. 1 person in the market, it’s more likely that the No. 2, 3, and 4 people are willing to jump on.”

In this case, the top person was Kawakami, a Bay Area native who made his bones as a beat reporter with the Philadelphia Daily News and the Los Angeles Times before joining the Mercury News as a columnist in 2000. His column had sophisticated analysis and news-breaking reporting, and he was an early adopter of blogs, podcasts, and Twitter.

Marcus Thompson and Tim Kawakami left the Mercury News to join The Athletic’s new site in the San Francisco Bay Area. Courtesy photo.

Like a lot of newspaper people, he had been thinking about an exit strategy.

“Anybody who’s paying attention understands the situation is dire for newspapers, both generally and specifically to Bay Area News Group,” Kawakami says, referring to years of layoffs, consolidations, and uncertainty at the company. “I just knew I could do what I was doing at the Mercury News somewhere else, and in fact it would be better somewhere else.”

Mather and Hansmann approached him last November. They had lunch, and they kept talking, but it took six months before The Athletic was ready for a Bay Area site, and before Kawakami was ready for a career move.

“It’s been fun,” Kawakami says of his first editing job. “I haven’t had that role before, but I had a strong idea about what I wanted. … I had a strong idea of what I wanted the page to look like. I knew who I wanted to hire, and we’ve been able to hire almost all of them.”

The Athletic Bay Area had a goal of 11,000 subscribers by the end of its first year. That number is higher now, Kawakami says, because the site started well ahead of that pace. The Athletic doesn’t release exact subscriber counts, but Mather says it’s on pace to beat its goal of 100,000 paying subscribers by early 2018. In Chicago, its most mature market, the site is seeing subscriber growth of better than 15 percent per month.

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“Our long-term ambition is to have tens of millions of subscriptions,” Mather says. “We think that is very possible.”

Even at the low end of that goal, with 10 million subscribers, The Athletic would have half a billion dollars a year in subscription revenue. That’s a massive figure for a news media company, far exceeding reported revenues for advertising-dependent sites such as BuzzFeed or the Huffington Post. (It’s also a far cry from ESPN’s $7.57 billion in cable-subscriber fees, and the network puts icing on the cake with billions in advertising revenue. The Athletic, on the other hand, doesn’t pay billions for broadcast rights to sporting events. ESPN, for example, pays $1.9 billion per year just to air NFL games.)

One of the ideas behind The Athletic is that people don’t like ads and do like good writing and reporting.

If The Athletic’s founders plan to cash out, those plans are far in the future. Hansmann says they’re not after “a quick flip,” because the business they envision will take time to build.

“There may be suitors in The Athletic’s future, but we’re committed to building a company that can sustain itself, regardless of whether we have access to venture capital or to a merger or acquisition,” he says. “If the rest of the media doesn’t want to invest in quality journalism, we’re happy to do it.”

The most financially successful market for The Athletic so far has been Toronto, where the site attracted about 10,000 subscribers and hit profitability about 10 months after its launch. Profitability for the company as a whole is years away, which is by design.

“We’re not focused on breaking even now,” Mather says. “We think about break-even on a micro scale, in a given city, but corporate-wide that’s less interesting to us. Our goal is to expand.”

Mather, 37, is a Philadelphia native and a lifelong sports fan; when he was seven months old, his parents brought him to the Phillies’ 1980 World Series championship parade. He conceived of The Athletic in 2011, when he was a vice president with Strava, a fitness app and website for serious runner and cyclists.

“At Strava, we thought, if you have a subscription business model, you could compete with Nike and Under Armour, because their model is to go broad and serve everyone,” Mather says. “Our model was to serve the die-hard athletes, and then there’s the aspirational group under that, which is a huge number of customers. We think the same is true with sports news.”

Hansmann, 29, is from Cincinnati and lives and dies with the Reds and Bengals. He joined Strava in 2014 and soon teamed up with Mather on The Athletic. He brought a finance and consulting background, including two years as an analyst with McKinsey & Co. and two more with a San Francisco private equity firm, as well as a frustration with surface-skimming sports reporting and ad-heavy websites.

“Alex had been noodling on the idea of The Athletic for a number of years already,” Hansmann says. “At Strava, he’d largely built the product. I’m not a technical person, and if I’m going to start a company I need to partner with someone like Alex.”

***

THE CONCEPT OF BUNDLING a news product around sports of all kinds and in all areas, rather than around every news topic in the reader’s region, was almost an accident, Hansmann says.

“We sort of stumbled upon this, this rebundling,” he says. “When we launched we were very local, and we looked at national coverage as too competitive for a small startup like us, but when you start to see writers like Ken Rosenthal and Seth Davis and Stewart Mandel become available to us, because other publishers can’t support the written word, we jumped at that opportunity.”

The bundle will become a bigger selling point for The Athletic as it covers more cities, and when it has more national coverage. The idea, Hansmann says, is a bundle that approximates what a reader could have had 20 years ago from a good local sports section and a subscription to Sports Illustrated.

“If you’re a fan in Philly, you can subscribe to the Inquirer and you can get Philly sports, Philly politics, Philly restaurant news,” Mather says. “Or you can pay half the price and get significantly better sports coverage, a better product from a technological level, with no ads, and your national sports coverage and coverage of other cities and teams.”

The local newspaper used to be the go-to source for local sports news, but newspapers are still tied to print deadlines and bundled with a lot of news that the sports fanatic might not care about.

The Athletic’s target reader is a sports fanatic, not just a fan—someone who listens to sports talk radio and knows the entire roster of the local teams. There’s a lot of competition for those fans, but not a lot of other outlets approaching them in the same way The Athletic does. The local newspaper used to be the go-to source for local sports news, but newspapers are still tied to print deadlines and bundled with a lot of news that the sports fanatic might not care about. They also happen to be in a death spiral of shrinking circulation and advertising revenue.

The other news media devoted to sports tends to be free. ESPN is paid for in most TV viewers’ cable bills, and also offers mountains of free content online, but it has cut back on some of its written coverage. Ad-dependent sites including The Ringer, Deadspin and the ESPN-owned FiveThirtyEight cover sports in sophisticated and interesting ways, but they also cover things other than sports, and they’re not quite pitched to the fanatical fan.

Pay sites tend to cater to niche markets, like Rivals.com, which covers high school sports and college recruiting. There are independent subscription-only sports sites in Boston and Pittsburgh, both of which will presumably have trouble competing with The Athletic’s deep pockets when the company moves into those cities (so far, The Athletic covers only hockey in Pittsburgh and isn’t in Boston at all).

“Putting up a paywall and putting up a site, that’s fairly easy and fairly low tech,” Hansmann says. “Where I think we have an advantage is, our DNA is here in Silicon Valley. We’re not just a collection of writers. We bring a lot to the table in terms of the marketing prowess, the technical background, and we have access to capital that allows us to pay writers competitive salaries.”

Some of The Athletic’s seed funding came from Y Combinator, the Bay Area startup incubator. Courtside Ventures, a venture capital fund that specializes in sports technology and media startups, was another early investor.

One of Courtside’s partners is Dan Gilbert, owner of the Cleveland Cavaliers. That’s a potential conflict of interest for The Athletic, since The Athletic Cleveland covers the Cavs. The Athletic’s founders retain control of the company, and say there’s never been any instance of Gilbert or any other investor pressuring them.

It’s an issue that could be addressed with a disclaimer, like the one that The Ringer runs when it writes about programming on HBO, one of its investors. But no such disclosure appears on The Athletic’s stories about the Cavaliers.

“We definitely talked about that,” Hansmann says. “With the number of degrees of separation, we felt it was not necessary.”

Jason Lloyd, a former sportswriter for the Akron Beacon Journal, covers the Cavaliers for The Athletic. Hansmann said Lloyd asked about Gilbert’s involvement as investor when The Athletic recruited him, and he was satisfied with the answer.

“Jason has been critical of Dan, and he’s been complimentary,” Hansmann says. “Ultimately, Jason was comfortable that he wasn’t going to be influenced by that indirect connection.”

***

THE ATHLETIC IS A SPORTS-ONLY SITE, but that doesn’t mean its writers will “stick to sports,” the catchphrase of the viewer, reader, or listener who doesn’t want any social issues mentioned in sports coverage. The Ringer’s Bryan Curtis declared “The End of Stick to Sports” in January, after Donald Trump became president, but it took nine months to put the nails in that coffin. It started with ESPN SportsCenter anchor Jemele Hill calling Trump a white supremacist on Twitter on September 11, and ended two weeks later with Trump in a verbal war with America’s professional athletes.

“I think the ‘stick to sports’ argument has been harpooned over the last couple weeks,” Fichtenbaum says. “It’s just not possible to stick to sports. Our philosophy is we want people to analyze and to write stories that are appropriate for the times.”

As an example, he points to two of Taylor’s recent columns: one on Hill and the death of “stick to sports,” and one on the widespread protests by NFL players who kneel for the national anthem to draw attention to police brutality.

“Phil’s got his finger on the pulse,” Fichtenbaum says.

When it comes to its own newsrooms, race has been a stumbling block for The Athletic. On August 20, Mandel launched the college football site with a post headlined, “Welcome to The All-American.” The column featured a photo of the site’s staff: eight people, all of them white. This did not go unnoticed.

“If The Athletic doesn’t embrace diversity, then they’re not going to be anything we haven’t already seen, or read, before,” Carron Phillips wrote in the New York Daily News.

Mather says he’s aware of the problem, and he realizes it could be a big one for The Athletic, since it is committed to hiring established, big-name journalists. The newspaper industry’s diversity problem will become The Athletic’s if the company doesn’t work to avoid that fate.

The newspaper industry’s diversity problem will become The Athletic’s if the company doesn’t work to avoid that fate.

“The Stewart Mandel issue, that is 100 percent my fault,” Mather says. “I went to Stewart Mandel and said, you have three and a half weeks to launch a college football vertical, and I will not take any excuses. He was under immense pressure from me to launch something, and he fell back on the old system, which is to ask your friends and ask everyone you’ve worked with, and that will get you more of the same. That is an unbelievable team—every single person on that team deserves their job—but we need to do better.”

Mather says The Athletic is working with the National Association of Black Journalists, the Asian American Journalists Association, and other groups to recruit journalists. He’s also talking to his employees, particularly Thompson, an active NABJ member who grew up in what he described in one column as “deep east Oakland.”

“I am a white male, and I would like to think I’m empathetic, but I don’t think me being empathetic is the right answer,” Mather says. “Marcus has played such a key role in opening our eyes to the issues in the industry. He’s fought through everything you can imagine fighting through in terms of a career in a white-dominated space, and he’s not shy about talking to us about it.”

Solving the problem of newsroom diversity is a lot to ask of one sports startup. Then again, so is solving the problem of dwindling advertising revenues and never-ending layoffs at local news organizations.

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Tony Biasotti is a freelance writer in Ventura, California. Find him on Twitter @tonybiasotti.