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Photo: The Athletic's Twitter

The Athletic, a subscription-based digital sports media company, raised $40 million in a series C funding round. With this investment, the company has raised a total of $70 million since its launch in 2016 and is valued at roughly $200 million, according to sources familiar with the deal.

Why it matters: The company, which makes money from consumer subscriptions, thinks it can meet high growth expectations from venture capitalists, many of whom are facing poor returns on investments in ad-based digital media companies.

Between the lines: The founders pitch The Athletic as both a direct-to-consumer brand and a digital media company, which has helped them lure investors amid a bleak outlook for some venture-backed digital media companies that focus on selling ads.

"Our revenue comes in recurring payments. It's a lot less explosive than ad companies — it's harder to build — but the payoff is huge in revenue foundation."
— The Athletic co-founder Alex Mather

Details: The round is being co-led by Founders Fund, a San Francisco-based venture capital firm that specializes in technology, and Bedrock Capital, a venture capital firm that specializes in early stage investments. Sources say Founders Fund has contributed a larger investment.

  • Other participants in the round include former backers like Comcast Ventures, Evolution Media Capital, Courtside Ventures, The Chernin Group, Y Combinator, Advancit, Amasia and Luminari, as well as new investors like BDMI.
  • While Peter Thiel is a founding partner at Founders Fund, sources say he's not directly involved in the deal. The Athletic confirmed that partner Napoleon Ta is brokering the deal.
  • The money will be used to invest in audience, data and editorial teams that drive subscriptions, per Athletic co-founder Alex Mather, as well as podcasts and video teams. Prior funds were used to poach veteran sports journalists with big salaries.

By the numbers: The company has 300 full-time employees, over 100,000 subscribers and a 90% renewal rate. Its subscription base is roughly the same size as the Los Angeles Times' digital subscription base, but it is 30 times smaller than the New York Times'.

  • The Athletic has journalists covering sports in 47 markets (up from 12 in January). Mather says most of its new markets are profitable, and its older markets are growing roughly 10% year over year.

The big picture: Digital upstarts are battling to upend decades of dominant sports coverage from ESPN, local papers and radio.

  • Bleacher Report, a popular digital sports franchise, was purchased by Turner in 2013 for roughly $175 million–$200 million. At the time, Bleacher Report had raised $40.5 million over five rounds. It launched an over-the-top subscription service last year.
  • Barstool Sports was reportedly valued at over $100 million in January. It's raised a total of $15 million over one round. It mostly invests in digital video and social media.
  • Players Tribune has raised $58 million over four rounds since it was started by Derek Jeter in 2014. Its audience is still relatively small.
  • SB Nation is ad-driven and is owned by Vox Media, which has eight media brands and has raised $307.6 million over eight rounds.
  • ESPN+, ESPN's monthly subscription product, has over 1 million subscribers, which includes members of the old ESPN Insiders program. (Mather considers ESPN+ to be the closest competitor to The Athletic because it's also subscription-based.)

The bottom line: Many of these outlets have a long way to go in catching up to legacy outlets with massive audiences and major live broadcasting contracts.

Go deeper

Federal judge blocks Biden's vaccine mandate for federal workers

President Biden speaking from Eisenhower Executive Office Building on Jan. 21. Photo: Yuri Gripas/Abaca/Bloomberg via Getty Images

A federal judge in Texas blocked the Biden administration from enforcing its coronavirus vaccine mandate for federal workers on Friday, citing the outcome of last week's Supreme Court ruling that nullified the administration's vaccine-or-test requirement for large employers.

Why it matters: It's a blow to President Biden's efforts to increase the U.S.' vaccination rates, though much of the federal workforce has already been vaccinated against the virus.

Updated 4 hours ago - Politics & Policy

Omicron dashboard

Illustration: Brendan Lynch/Axios

  1. Health: Pfizer and Moderna boosters overwhelmingly prevent Omicron hospitalizations, CDC finds — Omicron pushes COVID deaths toward 2,000 per day — The pandemic-proof health care giant.
  2. Vaccines: The case for Operation Warp Speed 2.0 — Starbucks drops worker vaccine or test requirement after SCOTUS ruling — Kids' COVID vaccination rates are particularly low in rural America.
  3. Politics: Biden concedes U.S. should have done more testing — Arizona says it "will not be intimidated" by Biden on anti-mask school policies.
  4. World: American Airlines flight to London forced to turn around over mask dispute — WHO: COVID health emergency could end this year — Greece imposes vaccine mandate for people 60 and older — Austria approves COVID vaccine mandate for adults.
  5. Variant tracker
Updated 5 hours ago - Economy & Business

Janet Yellen co-opts Reaganomics phrase for new Davos speech

Treasury Secretary Janet Yellen at a speech this week. Photo: Alex Wong/Getty Images

The U.S. needs to focus on increasing its productive potential, Treasury Secretary Janet Yellen told world leaders Friday, calling for what she terms "modern supply side economics."

Why it matters: She co-opted a phrase traditionally used by political conservatives to describe low-tax and deregulatory policies — and framed the Biden administration's initiatives as the best path forward to achieve greater national prosperity.