The two companies have reportedly considered building a broad portfolio of digital media brands.
The digital publishing industry received a jolt Friday morning that could have serious reverberations for years to come. News and politics startup Axios and global sports hub The Athletic are reportedly in talks for a possible merger capable of shifting the balance of power in media.
Discussions between the two popular outlets heated up last week, a source familiar with the situation told Ben Mullin of the Wall Street Journal.
Axios CEO Jim VandeHei told Mullin that the two companies were involved in talks; however, he was tight-lipped on details of any potential deal. VandeHei said, “We have talked for literally years about our shared passion for premium content businesses.”
The early buzz suggests that the merger may be part of a broader strategy to capitalize on that shared interest.
There is also speculation that the deal may result in the formation of a blank-check firm — legally known as a special purpose acquisition company (SPAC) — and the creation of a larger online-only publishing company. If this proves to be true, the SPAC model will allow for a quicker, cheaper path to not just new acquisitions, but eventually going public.
A SPAC is created specifically to raise funds required to finance a merger or acquisition opportunity that’s usually identified at its inception and given a set timeframe. Last year, online sports betting giant DraftKings ($DFKNG) side-stepped a traditional IPO, opting for a SPAC instead. The risk paid off handsomely, making it one of the best-performing SPACs of 2020; its stock is currently up over 600% from its April offering price of $10.
Media industry experts pointed out that the two outlets could both benefit greatly given The Athletic’s loyal, paying readership and Axios’ proven record of attracting high-profile sponsorships and curating media events. As of now, early reports indicate that both companies would continue to operate independently.
As of now, no deal is on the table and ink hasn’t hit paper. But if and when these events are set in motion, the world of digital media beyond just sports and politics is in for a shake-up.