Local Media Creates a Super Sports Bundle

The New York Times continues to make quite a few moves

When I think about local sports news, I remember my grandfather walking to the corner store and buying the New York Post and the Daily News. I don’t know why he needed both, but he always read them.

Sports news was a core part of that exercise with the back page of both papers being sports. You want to talk about clickbait, think about those headlines.

Whether it was the scores, play-by-play or drama in the locker room, the beat reporters that followed the teams around were the only source of sports news.

Local news was slow to adapt to the internet. And when they did adapt, it was all sensational; especially the sports section. For my fellow Knicks fans, according to our local papers, we’ve been getting every All Star to sign with us for a decade and they never come.

I digress…

It’s no wonder then that The Athletic was able to come along and build a business around local sports news. People were desperate for something good and this digital upstart was willing to offer it.

But it was more than that. The Athletic figured out three things that local papers had been slow to identify:

  1. Sports fans want more than just a play-by-play or a weak rumor. They want deeper reporting and the stories that they can’t get anywhere else.

  2. Readers want to ask questions and get access to the journalists who are in the locker room. Readers want to feel closer.

  3. Local sports is not as much a thing anymore. People are fans of teams from all over.

That third point is what The Athletic exploited that local papers couldn’t. Let’s say I want news about the Dallas Mavericks. If I go to Dallas Morning News, I will hit a reg wall to read any story. I don’t want to subscribe because Dallas isn’t my home, so I leave. I’ll pay The Athletic $60 a year and get the complete bundle.

Color me surprised when I read the news today that many local newspapers had teamed up to offer a bundle similar to what The Athletic offers called The Matchup.

In an announcement published on Google, Mike Orren, Chief Product Offer at Dallas Morning News wrote:

Overall, the concept was born out of the notion that in order for local journalism to thrive, individual news organizations must lean into creating content and product experiences for our readers that is both unique and differentiated, and that we might need to collaborate with each other in the process. Sports is a huge user need and newspapers excel in that area—nobody covers the Dallas Cowboys (or Mavericks, Rangers or Stars) like The Dallas Morning News. The same is true all over the country, but it is prohibitive to subscribe to fifty different sites to get that depth of coverage.

The way it works is actually pretty straight forward and remarkably forward thinking.

Initially, when reading about an upcoming game on your hometown news site, you will read stories from the opposing team’s local site too. If you want to read stories from the opposing team’s site, you won’t have to subscribe to their local news outlet to do so.  We’re achieving this by using AMP, along with a framework from our friends at Distributed Media Lab. 

Soon, while continuing the content share, we will also launch a destination site specifically for The Matchup, which will showcase local sports news and columns covering all major pro and college teams in the United States and Canada. The site will be free to anyone with a subscription to a participating local news site—and that will be the only way to access the wealth of information at The Matchup. You’ll be able to follow specific teams, leagues and players with a customized daily dashboard.

The way I understand it, phase one opens the article in a popup while you’re on your hometown news site. You never actually go to the other news website, which is how a reader is able to avoid the paywall.

But it’s phase two that really starts to get me interested. By creating The Matchup, the consortium of local papers are basically taking a shot at The Athletic. Users will have a single destination where they can get all their national sports news, but produced by their local papers versus a company less than five years old.

There are a few things that these newspapers are going to have to figure out.

First, the marketing. It is going to be incredibly important that they make it clear to people that when they’re subscribing, they’re getting more than just their local sports news. That requires introducing The Matchup as a brand, which might confuse people.

Second, how they handle The Matchup. According to Orren, the goal is for the site to pay for itself; it’s not chasing any profit itself, which is fine. However, an aggregator of all that local news is going to very quickly start generating traffic and how they handle that is going to be critical.

Let’s say I come to the site and I don’t have a subscription to any local newspaper. Am I going to hit an immediate paywall or receive a metered paywall? If I do decide to become a paying subscriber, who am I subscribing to? The Matchup or a local newspaper? If it’s the former, how is the revenue divvied up? If it’s the latter, which local newspaper? You could argue that if I’m a New Yorker, but I happen to hit the hard wall on a story about Dallas, that the money should still go to a New York paper. That is my local paper after all.

But perhaps what this really is, more than anything, is a very strong defensive play for local papers. Now if I have a subscription to a local paper plus The Matchup and I see The Athletic offering all sports teams for $60, I’m less inclined to switch. Now I’ll get all my local news plus national sports news for one price.

None of this means this will work, of course. Media alliances always come with major fan fair, but quickly die away. However, this one does feel a little different primarily because it addresses two subtle, but important points.

  1. It’s not a centralized subscription that might cannibalize local revenue; rather, it’s a local subscription that then opens up content from other papers a reader would never subscribe to

  2. It’s potentially additive to revenue—by reducing churn and theoretically driving new subs—without any additional work on anyone’s part.

I’ll be paying very close attention to this. If it works for local sports, there’s an argument that it could work for other news. But I’ll leave that for another time…

The New York Times makes moves

The New York Times announced that Meredith Kopit Levien, the current COO, would become president and CEO on September 8th.

Kopit Levien has been the executive in charge of growing all revenue at The Times since April 2015 when she was named EVP and Chief Revenue Officer. She had been in charge of advertising before that, but this move put subscriptions under her purview as well.

According to a story by Axios:

The big picture: Kopit Levien's impact on the Times to date cannot be overstated.

  • She is credited with turning the business around from being mostly dependent on advertising to getting most of its money from subscriptions.

  • She transformed the company's business structure to more closely integrate product and data.

  • Kopit Levien also modernized The Times' advertising business to rely more heavily on creative digital solutions, like sponsored content, than traditional print ads.

Jessica Lessin of The Information interviewed Kopit Levien (paywall) soon after the announcement and a couple parts jumped out to me:

Second thing is, we are trying to more firmly establish the Times as a world-class digital product and tech company. … Engineering is the fastest growing functional discipline other than journalism. It is the single largest function on the business side. To get where we are going, we have to make some of the best journalism there is and we have to be the best place to experience that journalism. We have to be a destination. That means we have to get software. 

This is critically important and it makes perfect sense to me. Too often, we don’t provide the tools for our journalists to succeed nor do we offer a delightful experience for readers. Although I disagree with the headline of the story—we’re all tech companies now—it’s clear that The Times isn’t going to take its foot off the gas on building better product.

The other part worth looking at is Kopit Levien’s thoughts on advertising.

I think as long as we and other publishers have deeply engaged audiences and a lot of signal and data, we will have a strong ad business. It is a material contributor to the economics of the company. Our ad business is derivative of our subscription business. That is the right place to be. That is how you get a company and culture and user experience and product excellent, as opposed to more ads on pages. 

In some ways, it is a little back to the future. The whole industry got away from the value of the ad business being brand association and is coming back to that.

Rather than getting rid of advertising, Kopit Levien is leaning into it in the right way. While subscriptions come first, when you have as much data about users as The Times has about its paying subscribers, it becomes a good opportunity to further monetize. Additionally, the same people that are paying are likely the types of people premium brands would want to target because they likely have higher disposable income.

This is how we should all be thinking about what we’re doing. While the subscription might be a primary revenue driver, if we’re collecting ample 1st party data, we can still have a healthy, secondary advertising business. Diversification is still important even when you’re The New York Times.


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