The Athletic, in recent years a safe harbor for veteran sports journalists idled by the collapse of daily newspapers, will lay off 46 workers — 8% of its staff — and implement company-wide pay cuts due to the effects of COVID-19.
Sports in the U.S. are just now making a gradual return, with the NBA, NHL and pro golf leading a comeback in June and July and college and pro football hoping to follow in September. The 2020 landscape has been bleak in recent months, though, with the daily scoops served up to subscribers of The Athletic not resonating in the absence of live games. Management said the lack of sports caused a 20% to 30% slowdown in subscription growth, while an overall pullback by marketers during the economic downturn hurt another key area, podcast ad revenue.
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Most staffers will take a 10% cut to their pay for the remainder of the year. Those earning at the high end of the pay scale will be asked to forfeit more than 10%.
“With sports on pause due to the ongoing pandemic, today we made the difficult decision to reduce the size of our staff in select coverage areas,” a spokesperson said in a statement. “While we are hopeful that sports will soon resume, this measure was necessary to ensure that the company can weather the uncertainty that lies ahead. Overall, our subscriber base remains steady and we are proud of our newsroom’s continuing coverage of the return of sports.”
Alex Mather and Adam Hansmann, who co-founded The Athletic, came into the year expecting it to turn a profit in 2020. In January, the company completed a $50 million fundraising round. According to news site Axios, which was the first to report news of the cutbacks, the January raise lifted the total amount of financial backing to $139.5 million and valued the company at about $500 million.
The disappearance of sports and the difficulty of navigating through COVID-19 has hurt other sports-dependent businesses. Also Friday, Sports Illustrated parent TheMaven set 15% pay cuts for staff, on top of a previous round of reductions in March, a move expected to save the company $3 million in 2020. In an SEC filing, the company cited a steep drop in ad impressions, which fell “further than anticipated, reaching historic lows for the digital media industry.”
If digital ad spending bounces back by the fourth quarter, as most industry observers and analysts are forecasting, the pay cuts will be reversed at the start of 2021, TheMaven said.
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