Spotify to pay up to $196 million in cash for The Ringer
Spotify disclosed in an SEC filing Wednesday that it is paying up to $196 million for The Ringer, a sports media company founded by former ESPN personality Bill Simmons.
Why it matters: It's a solid payout for The Ringer, which was created just four years ago. The Ringer's podcast revenues surpassed $15 million in 2018, and the company says it's profitable.
Details: Spotify said it entered a deal with The Ringer to pay between €130 million and €180 million (roughly $140 million and $196 million), subject to closing costs as well as deferred payments.
- The deferred payments are based on contingencies, like performance and whether executives from The Ringer stay with Spotify after the deal closes for an unknown period of time.
The big picture: The acquisition speaks to Spotify's massive investment in podcasting over the past year, as the company aims to expand its offering solely from music to audio, including podcasts.
- Spotify spent nearly $400 million to acquire podcast companies last year, after committing to spending at least $500 million on podcasting at the beginning of that year. This acquisition means Spotify has exceeded its upfront commitment.