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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

26 mins ago - World

Biden to push vaccine-sharing at UN, but boosters at home

Expand chart
Data: Our World in Data; Chart: Kavya Beheraj/Axios

President Biden will convene world leaders on Wednesday on the sidelines of the UN General Assembly to push them to do more to end the pandemic — though he's also facing criticism for prioritizing boosters at home.

Why it matters: There is still no functional plan in place to vaccinate the world, and past summits of this sort have flopped. The White House hopes that this virtual gathering will produce ambitious promises, accountability measures to track progress, and ultimately help achieve a 70% global vaccination rate this time next year.

GOP operatives accused of funneling Russian cash to Trump

Jesse Benton, spokesman for the Ron Paul campaign, speaking to reporters in the spin room after the CNN Debate on January 1, 2012. Photo: Robert Daemmrich Photography Inc/Corbis via Getty Images

A former senior aide to Senate Minority Leader Mitch McConnell and Sen. Rand Paul was indicted this month for allegedly funneling $25,000 from a wealthy, unnamed Russian to former President Trump's reelection efforts.

The big picture: The Justice Department alleges that Jesse Benton, 43, the husband of Paul's niece and a veteran Republican staffer, orchestrated a scheme to conceal the illegal foreign donation with another GOP operative, Doug Wead.

Biden to raise refugee admissions cap to 125,000

Afghan refugees arrive at Dulles International Airport after being evacuated from Kabul. Photo: Chip Somodevilla/Getty Images

The Biden administration will raise the refugee admissions cap to 125,000 for the next fiscal year beginning in October, the State Department confirmed in a statement Monday.

Why it matters: The move comes as the U.S. contends with resettling tens of thousands of Afghan refugees stateside, and as the world faces "unprecedented global displacement and humanitarian needs," the department wrote.