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The Athletic: 500,000 Subscribers Have Joined Us

The Athletic has reached 500,000 subscribers with aggressive plans to double that figure by the end of the year, Bloomberg revealed. CEO Alex Mather said the company averages $64 in annual revenue from every subscriber. It’s a rare peek behind the scenes of the company, which many believe is a trial balloon for the industry and whose failure would result in a precipitous cratering of opportunity.

The Athletic is also hiring most of the relevant soccer writers in the United Kingdom, so the opportunity for rapid international growth. There’s also an intense focus on building out the audio and visual departments. A spokesperson for the website told The Big Lead last week that there are “roughly 366” editorial employees in America.

My colleague Ryan Glasspiegel wrote this about trying to wrap one’s brain around the finances 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.

The half-million figure is far higher than most outsiders have imagined, which is good news for The Athletic, which has also accumulated more than $90 million in funding. Mather also told Bloomberg that while the company is not profitable overall, it is profitable in most markets.

There is, one figures, a cap on the high-end for subscribers; there is a finite number of people in the markets serviced willing to pay for sports content. That said, it’s reasonable that the overall number who plop down their money will steadily increase as more markets are included in The Athletic’s footprint.