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Analyzing the M&A Process Overview of The New York Times and AMC Networks

  • Nadine Ghiran - SUBTA
  • Jan 12, 2022
  • 5 minute read

The New York Times (NYT) and AMC Networks Inc. both expanded their portfolios last week by acquiring hyper-focused subscription brands to enhance their own offerings.

AMC Networks acquired Sentai, the leading global supplier of anime streaming content and merchandise, as part of an effort to grow its own leadership in the targeted streaming industry.

Meanwhile, NYT acquired The Athletic, a subscription-based sports media company, in a $550 million, all-cash transaction that is expected to close by April 1.

Read on to understand the M&A process overview of each media company and how they are attempting to fuel their subscriptions’ growth by adding value to their offerings.

M&A Process Overview #1: AMC Networks Acquires Sentai

The streaming market is more competitive than ever. AMC Networks is exploiting one of the biggest content niches in the world to grow its audience: Anime fans.

The global anime market reached a valuation of nearly $25.5 billion in 2021, according to a report by Grand View Research, and is expected to reach just over $48 billion by 2028. 

These projections partially explain AMC Networks’ decision to acquire Sentai and its anime streaming service, HIDIVE

“This acquisition (…) furthers our targeted streaming strategy of super-serving passionate audiences with content depth, curation and community,” said Matt Blank, AMC Networks’ Interim CEO, in a press release. 

Sentai also benefits from the acquisition by partnering with a fast-growing streaming service.

“This acquisition will not change Sentai’s mission to deliver the most exciting anime content to audiences around the world — it will expand it greatly and will give our content businesses more distribution, more partnerships, more scale and more reach,” said John Ledford, Sentai’s Founder, about the M&A process overview in the press release.

Sentai’s anime streaming service will be an impactful addition to AMC Networks’ portfolio, according to the press release, as the company sets its eyes on growing its own streaming offering through new markets and niche services.

M&A Process Overview #2: The New York Times Acquires The Athletic

NYT sought to buy The Athletic to “accelerate our long-term growth strategy and advance our vision of making The New York Times the essential subscription for every person seeking to understand and engage with the world,” said Meredith Kopit Levien, President and CEO of The New York Times, in a conference call.

The Athletic’s newsroom will continue to run independently of NYT and will be sold as a standalone subscription, according to the conference call. Future plans will bundle the two offerings together.

David Perpich, Head of Standalone Products at NYT and an influential contributor to NYT’s original digital subscription model, will assume a new role overseeing The Athletic and its team.

The Athletic will also help NYT reach its goal — made in Q4 2018 — of 10 million paid subscribers by 2025. As of Q3 2021, the NYT has more than 8 million. 

The acquisition of The Athletic would add another million to the NYT’s subscriber base, meaning the company could be 600,000 subscribers shy of reaching its 2025 goal once the acquisition papers are signed.  

NYT tried to acquire The Athletic in June 2021, but the deal fell through after the two media publications couldn’t come to an agreement, according to The Information reported by Forbes. NYT declined to comment on its previous discussions with The Athletic but a representative told SUBTA that, “Now was the right time for the acquisition.”

Providing Value One Acquisition at a Time

Both AMC Networks and NYT are seeking opportunities in spaces outside of their regular content.

NYT has been looking in areas other than widespread interest news in order to continue providing value to the lives of its subscribers, Levien added in the conference call. 

“Sports occupies a huge place in the fabric of global culture, with deeply passionate fans and followers who want to consume everything there is to know about their favorite teams, leagues, and sporting events,” she said. “The Athletic was built to serve those enthusiasts.”

NYT has long been covering sports for a general interest audience, Levien continued. Once official, The Athletic’s journalists and current operations will help NYT hone in on its sports media sector at a different scale through the access to more than one million paid subscribers and roughly 450-person newsroom, according to The New York Times’ Investor Presentation

“If we were to have tried to build something, it would have been The Athletic,” Perpich said in a NYT article. “And so when we saw it, we just said, ‘We should acquire it as opposed to trying to replicate what they’re doing.’”

NYT broke the strategic value down for investors in its presentation. The acquisition of The Athletic is a critical piece in NYT’s long-term growth strategy, the expansion of its digital product portfolio, its dedication to providing subscribers with sports content in a different capacity than its existing coverage, and in its effort to deepen relationships with current subscribers. 

Likewise, AMC Networks will be able to use its acquisition of Sentai to capitalize on a rapidly growing industry and boost its revenue and subscriber base of more than 6 million people — as of Q4 2020. AMC Networks will own HIDIVE, adding it to the tally of its growing targeted streaming services: AMC+, Acorn TV, Shudder, Sundance Now and ALLBLK.

AMC Networks reported a net revenue of more than $800 million in Q3 2021 and was on track to reach its 2021 goals of 9 million paid subscribers. Sentai’s HIDIVE and its subscribers could help streamline AMC Networks’ goal of having 20-25 million paid subscribers by 2025.

As the subscription industry becomes a more competitive space, businesses looking to grow or cement their lead in a specific marketplace are now expanding through acquisitions and mergers.

“With subscription services as the future of customer buying behavior, we’re going to see a lot more businesses pivoting to the subscription model — and that means a lot more acquisitions, too,” says Christopher George, Co-Founder and Chairman of SUBTA.

These latest acquisitions signal there is no end in sight when it comes to the merger and acquisition trend in the subscription space. All that’s left to determine is if you are building your business to get acquired or to make the acquisition yourself. Not looking to do either? As long as you are fulfilling your passion, there will always be room in the subscription community for you. 

Key Takeaways of both M&A Process Overviews

  • AMC Networks acquired Sentai, the leading global supplier of anime streaming content and merchandise.
  • The New York Times acquired The Athletic, a subscription-based sports media company, in a $550 million cash transaction.
  • AMC Networks is capitalizing on a growing industry and this acquisition “furthers our targeted streaming strategy of super-serving passionate audiences with content depth, curation and community,” said the company’s Interim CEO, Matt Blank.
  • The Athletic will help reach The New York Times’ goal of 10 million paid subscribers by 2025 and help it to become “the essential subscription for every English speaking person seeking to understand and engage with the world.”

 


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