The Athletic Ventures Outside the Paywall and Into Advertising

(Bloomberg) -- The Athletic, a sports-news upstart that relies on reader subscriptions, is making its first major foray into ad-supported content.

The company is introducing a daily podcast later this month called “The Lead,” working with Wondery LLC to produce the show from Los Angeles. It is the first daily podcast for the Athletic and the first to be published entirely outside the site’s paywall. Wondery is a veteran podcast producer best known for true-crime programs such as “Dirty John.”

The idea is to mimic the success of “The Daily,” a New York Times podcast that leads the industry in U.S. listeners. Hosted by Kavitha Davidson and Anders Kelto, “The Lead” will take a similar approach of focusing on one major story each day.

“There hasn’t been, up until now, a daily in-depth sports podcast that does for sports what ‘The Daily’ has done for general news,” Hernan Lopez, founder and chief executive officer of Wondery, said in an interview.

In each episode, Davidson and Kelto will talk with reporters from the Athletic about a story they are covering in their written work. The first episode will address next week’s NFL game between the New Orleans Saints and the Los Angeles Rams, a rematch of last season’s NFC championship game, which included one of the worst blown calls in league history.

On Location

The show will be distributed on Apple, Spotify and other major podcast platforms on weekdays beginning Monday.

“They have more reporters in the places where the story is happening than anybody else,” said Lopez, who will be announcing the launch of “The Lead” at a podcast industry conference in San Francisco on Wednesday.

Though the podcast will feature ads, the main idea is to get the Athletic in front of more people.

“For us, it’s really about finding potential subscribers,” said Alex Mather, co-founder and CEO of the Athletic.

Mather and his co-founder Adam Hansmann started the site on the premise that sports fans would pay to read original reporting about their favorite teams. It began in Chicago in 2016 and now has more than 400 reporters and editors covering more than 270 teams in nearly 50 cities in the U.S. and Canada, as well as the English Premier League.

Venture Backing

In August, Mather said the site had more than 600,000 subscribers. The company has raised more than $90 million in venture capital and has yet to turn a profit.

The absence of advertising has been a selling point for the Athletic since its founding. “The Lead” will include as many as three ads in each 20-minute show, but podcast listeners have grown accustomed to that approach.

“It generally is a part of free podcasts and we’re comfortable with that,” Mather said. Athletic readers, he said, can rest assured that this is not the beginning of ad creep on the site. “We may experiment with advertising on free products, but our subscription product is absolutely sacrosanct.”

The Athletic first ventured into podcasts in April of this year and now produces 85. Most run on a schedule of one free episode per week, plus an additional episode for subscribers only. Up until “The Lead,” only one of its podcasts -- a weekly show about the Cincinnati Bengals that had advertisers before it became part of the Athletic platform -- included ads.

The Athletic and Wondery will split revenue from “The Lead” evenly, after subtracting Wondery’s production costs. The 20th Century Fox movie “Ad Astra” is slated to be the first advertiser.

To contact the reporter on this story: Ira Boudway in New York at iboudway@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, John J. Edwards III

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