For several years now everyone in this industry has wondered if The Athletic can sustain their headcount growth, and then they keep ballooning even more. If it seems like you’ve seen announcements they have hired 30 writers in about the last month alone and that they must have over 300 people by now, your impressions are accurate. A spokesperson for the subscription site tells The Big Lead that they have “roughly” 336 editorial employees in America; since June 19th, they’ve announced all of these hires:
Mike Sando (NFL), Zak Keefer (Colts), Joe Buscaglia (Bills), Aaron Fentress (Seahawks and Oregon), Matt Schneidman (Packers), Jon Machota (Cowboys), Philip Heilman (Jaguars), Zach Berman (Eagles), Jourdan Rodrigue (Panthers), Kat Terrell (Saints), Jeff Duncan (Saints, New Orleans), Brody Miller (LSU), Harman Dayal (NHL), CJ Holmes (AZ Cardinals), Andy Staples (CFB), Kelli Stacy (Arkansas), Josh Kendall (South Carolina), Peter Baugh (Mizzou), Dave Southorn (Boise State), Austin Meek (Michigan), Allan Taylor (West Virginia), Kaelen Jones (Texas), Chris Kamrani (Utah), Shaheen Al-Shatti (MMA), Chad Dundas (MMA), Ben Fowlkes (MMA), Josh Gross (MMA), Chuck Mindenhall (MMA), Fernanda Prates (MMA), Rafe Bartholomew (boxing), Mike Coppinger (boxing), and Lance Pugmire (boxing).
And this doesn’t even scratch the surface of their expansion. They’ve added audio and video platforms in recent months. There are also a number of part-timers — The Athletic Wisconsin, for example, announced yesterday that Jason Wilde would be a contributor to Packers coverage. And as they move to Europe, a Buzzfeed story paints a picture of nearly every relevant soccer writer and editor in the UK on the precipice of joining them, with the ones who have held out being poached by rival newspapers. This hiring spree, the story says, has “set off a bomb” in the industry and is akin to a free agency frenzy (or, to use their terminology, the transfer window) of the athletes they cover.
How are they doing this? Awful Announcing reported last month that The Athletic raised a new $22 million funding round, as Digiday tabbed the total funding at over $100 million. The last time we discussed this matter, The Athletic had crossed the 100,000 subscriber threshold but we noted that they needed several times more to endure; Digiday, citing a spokesperson, says they are now in the “low hundreds of thousands” and that they retain 90 percent of their subscribers.
From the outside, The Athletic must be surpassing their internal subscription goals for them to have the ability to keep raising more capital, and any thoughts on whether they intend to be self-sustaining from a P&L perspective or hope to be acquired would amount to speculation.
Nonetheless, some back-of-the-envelope math suggests what they are up against to earn more than they spend. If you estimate that each employee in America, between salary, benefits, and travel expenses, costs the company $100,000 (which is a round number, but could very well be conservative) on average, they would have to sell 560,000 subscriptions at $60 a year — what it costs after the teaser rate in the $30-$40 range expires — to break even. There are other costs as well, including advertising on social networks and non-editorial employees, and this also doesn’t take into account inevitable further expansion. When you get into the fact that these investors are presumably aiming for double-digit returns on their capital, you start to wonder if they need upwards of a million subscribers for this to be worthwhile for them.
For me personally, The Athletic has enough proprietary intel on my favorite teams combined with relevant national voices that it is an essential product, but it’s difficult to extrapolate that out for an estimate of how many other people in the world feel the same way.
What I do know is that while I can be skeptical of whether this is all gonna work, my desire for The Athletic’s endurance supersedes any feeling of wanting to be right. They have lifted the boat of compensation expectation across the whole industry and it would take years of pain for everyone who works in it — whether they’re at The Athletic or not — to recover if that tanker capsizes.