New York Times profits plunge $7M to $51M as it swallows up losses from $550M purchase of The Athletic in February
- The New York Times reported a loss in operating profits this quarter, seeing them drop by $7.2 million to $51 million
- The drop-off is partly due to their acquisition of the sports publication, The Athletic, which they bought for $550 million in February
- The Athletic has slightly outperformed expectations as of late, but is still eating into the company’s profits
- They have seen an increase in engagement when it comes to the games they offer after famously buying the hit word puzzle, ‘Wordle,’ earlier this year
The New York Times has seen its operating profits tumble by $7.2 million to $51 million after acquiring The Athletic in February, despite revenue hitting $555.7 million, up 11.5% year on year.
Operating losses at The Athletic, which was bought by the Times for a whopping $550 million, were $12.6 million for the most recent quarter from April to June, down from about $19.4 million in the first quarter.
The Times now has 9.17 million paid subscribers after adding 180,000 last quarter, and aims to have 15 million subscribers by 2027.
One subscriber may have subscriptions to other Times products aside from the newspaper, including The Athletic and Wirecutter.
Meredith Kopit Levien, president and chief executive officer of the Times, said in a statement: ‘Our second quarter results demonstrate that we are making palpable progress on our strategy of becoming the essential subscription for every English-speaking person seeking to understand and engage with the world.’
The statement outlined the reasons for the increase in revenue and said the bump was caused ‘primarily due to growth in the number of subscribers to the company’s digital-only products.’
They also added the increase was in part due to ‘subscriptions graduating to higher prices from introductory promotional pricing, as well as the inclusion of subscription revenue from The Athletic.’
While the publication is strengthening it’s digital readership and subscriber base, they took an expected hit in their print subscription revenue and watched it fall 2.8% to $144.9 million.
Advertising revenue for the company increased by 4.1% in the latest quarter, and while print advertising revenue increased by 15.1%, the Times still sees more revenue produced from digital advertising, which fell 2.4%.
Print advertising rose to $48.1 million, while digital advertising fell to $69.3 million and makes up 4% less of the Times’ revenue compared to the same quarter last year.
The New York Times has seen its operating profits tumble by $7.2 million to $51 million after acquiring The Athletic in February, despite revenue hitting $555.7 million, up 11.5% year on year
President and chief executive officer of the New York Times Meredith Kopit Levien said she wants to make the publication the ‘essential subscription for every English-speaking person seeking to understand and engage with the world.’
The online advertising market has heated up in recent months, partly because of historic increases in inflation and also changes in foreign exchanges for currencies.
Digital advertising revenue decreased primarily as a result of the macroeconomic environment,’ they said in the statement, adding there were ‘fewer programmatic advertising impressions.’
The Athletic slightly outperformed expectations, racking up a revenue of $19.5 million, which was mostly gained from the 50,000 standalone subscribers it gained in the quarter.
Kopit Levien said ‘we have moved faster than initially anticipated in adding it to the bundle,’ meaning the company predicts The Athletic’s affect on overall profit ‘will be less negative than we forecasted at the time of acquisition.’
The Times also said they have seen an increase in engagement when it comes to the games they offer after famously buying the hit word puzzle, ‘Wordle,’ earlier this year.
‘Weekly active users of Wordle have come down off the peak as expected but they remain high and we have successfully capitalized on portal demand to drive engagement with our broader portfolio of games,’ the statement read.
The number of users that engage with two or more games on the NYT website has ‘has nearly doubled quarter-over-quarter’ according to Kopit Levien, though she declined to specify how many people had subscribed for the company’s news product versus its other products.