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May 25, 2016, 9:19 a.m.
Business Models

Chasing subscriptions over scale, The Athletic wants to turn local sports fandom into a sustainable business — starting in Chicago

“It’s very easy today to be click-driven and produce articles that don’t have a lot of substance or depth and don’t cost that much to produce, but that dynamic is disappointing for fans who want higher-quality content.”

If you’re trying to start a local subscription-based sports site, it helps if your local teams are actually playing well.

That was part of the calculus for the Chicago launch of The Athletic, a subscription sports site that charges $10 a month (or $60 a year) for access to premium news and analysis. And, indeed, Chicago has been a good place for sports fans lately: The Cubs finished the 2015 seasons with the third-best record in the Major Leagues, and currently top the National League standings with a 29-13 record, as of this writing. The White Sox, too, are at the top of the standings, and while the Blackhawks lost in the first round of the playoffs this year, they’ve won three Stanley Cups since 2010 — including last year. It’s a good time to be a Chicago sports fan.

“We wanted to avoid a scenario in which we went into a market with a great idea and were executing well, but the teams were crappy and people just weren’t as interested,” said co-founder Adam Hansmann, who launched the company with CEO Alex Mather earlier this year. “We didn’t want that false start.”

The Athletic’s target readers are the most diehard Chicago sports fans, people who are “used to the idea that if you pay for things, you get good things,” said Hansmann. He said that The Athletic will be able to build a “pretty big” business off of this small but dedicated audience.

The idea that that the site could succeed by intentionally avoiding the scale-for-scale’s-sake imperative gripping other publishers was born out of the founders’ experiences working at Strava, which creates software for people to track their workouts. Hansmann said that Strava “wasn’t trying to be everything to everyone” and, as a result, was better able to serve a specific, much smaller segment of runners and cyclers.

At The Athletic, serving a hardcore audience means not only just covering games and player movements, but doing so in a way that’s steeped in data and analytics. Access is also core to the approach: The Athletic regularly interviews players and front-office personnel, bringing an air of exclusivity to the site’s content. The site’s four full-time writers and five freelancers publish five to eight stories per day.

“We want to make sure we’re putting numbers behind the opinions,” said Jon Greenberg, The Athletic’s editor and lead columnist. “If you want to stand out and want people to pay for your stuff, you have to give them a different kind of coverage.”

Greenberg, who spent seven years as a Chicago-based ESPN columnist, said he was initially skeptical when The Athletic’s founders approached him with the idea of helping to run a subscription-based site. After all, there are many reasons why a subscription sports site wouldn’t work. Sports is a hyper-competitive space on the Web, with no shortage of big and small publishers churning out free content. That’s hard for any site to fight against, particularly one that locks its content behind a paywall.

But while it’s hard to compete with free, it’s far from impossible. The Athletic’s strategy may draw obvious comparisons to recent paywalled efforts such as the Information, but the model actually most closely resembles DK Pittsburgh Sports, the two-year-old sports site created by Pittsburgh sports media veteran Dejan Kovacevic. DK Pittsburgh Sports, which charges $24 for an annual subscription, attracted 14,000 subscribers in its first year.

It’s too early to say whether The Athletic will rise to similar heights, but Hansmann said that the base is “growing very well” so far (he wouldn’t share specific numbers). While the site has raised a small amount of outside money from Precursor Ventures and several angel investors, and plans to raise more down the line, the team so far doesn’t feel the pressure to scale its readership quickly, as many venture capital–backed media business do. The site plans to test and build the formula in Chicago before expanding it to other cities.

“It’s very easy today to be click-driven and produce articles that don’t have a lot of substance or depth and don’t cost that much to produce,” Hansmann said. “But that dynamic is disappointing for fans who want higher-quality content. We’re not about trying to be the next ESPN or something, but finding the segment of fans that care deeply about their teams and serving them with something that’s high-quality.”

Photo of young cubs fan by Phil Roeder used under a Creative Commons license.

POSTED     May 25, 2016, 9:19 a.m.
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