Two digital media publishers are in talks to merge and explore going public via SPAC in a consolidation move in a fragmented market.
What Happened: Axios and The Athletic have discussed a merger and plans to go public via SPAC, sources told the Wall Street Journal.
A potential deal would combine news startup Axios with sports media publisher The Athletic.
Axios CEO Jim VandeHei was approached by Athletic CEO alex mather about a merger last week, the WSJ's sources reportedly said. The two companies have had conversations about business opportunities during the pandemic, with talks elevating recently. It is unclear which company would lead the way going forward.
The companies are said to discuss continuing as distinct digital media properties with their own staff and locations post-merger.
The Athletic sells subscriptions at $7.99 per month and counts over 1 million subscribers. The company is said to have posted revenue of $80 million in 2020.
The Athletic competes against Walt Disney Company (nyse: DIS) unit ESPN and (NYSE: T) unit Bleacher Report.
Why It's Important: A combined company of Axios and the Athletic could use its scale and leverage to attract better talent and advertising rates. A merger could also lead to further consolidation within the digital media space.
A merger and possible public listing could also help the combined company make strategic acquisitions in the space and find opportunities to diversify into other media areas.
Group Nine Media and BuzzFeed are additional digital media companies that have explored going public via SPAC. BuzzFeed has been in talks to go public with 890 Fifth Avenue Partners (NASDAQ: ENFA), according to Bloomberg.
Source: yahoo finance – Axios, The Athletic Discuss Merger, Eyeing SPAC Deal: Report