Media Top Stories
6 mins read

Re-inventing the ‘Bible of Baseball’ – Rich Routman, CEO of Sporting News, on the renaissance in sports publishing 

Sporting News may be one of the oldest sports publishers in the globe, with a story that dates back as far as 1886. Yet the company, which was for many years the ‘bible of baseball’ in the US, has been consistently nimble on its feet when confronting changing market conditions.

In 2023, CEO Rich Routman is surveying yet another significant opportunity. In the past few years, sports betting, which was once a niche, regulated and localised, has become a massive globalised industry.

As Rich puts it, “betting has been regulated in certain markets around the world for quite some time. However, there are a number of markets that are evolving like the US, Brazil and Japan. So you have a tonne of markets that are progressing on regulating sports betting where you can now do business.”

Sporting News has responded to the shifts in market conditions with two important actions.

Firstly, it has taken $15 million of funding to help it capitalise on its affiliate-related opportunities, some of which are driven by sports betting. Secondly, it has changed its business strategy from focusing on revenue per page views to what it calls LTV or the lifetime value of its readers.

The moves are powered by its shift from being largely a North American-focused entity to becoming a global player.

As Rich explains:

“The expansion to be present and relevant in markets beyond the US was a shift that the business made several years ago. We are obviously live in parts of Southeast Asia, like Thailand and Vietnam, while Australia has always been a big market for us. We are also active in Latin America and Canada, in addition to the US. Our goal is beyond being the home of US sports internationally. It is also to make sure that we cover the local sports and local languages that make the most sense for the audiences that are in those markets.”

Affiliate-centred multiple revenue streams

At the same time, the online sports market, which was once very dependent on display advertising, has begun to embrace new monetisation strategies. 

One newer innovation is around subscriptions. The Athletic built up a customer base of over a million subscribers for its high-end, forensic coverage of a wide variety of sports. Ultimately, it led to the The New York Times acquisition of The Athletic in January 2022

The shift to a more international-focused play has also been one of the catalysts for looking again at its business strategy. Rich is, however, adamant that talk of a shift to LTVs doesn’t mean Sporting News is jettisoning display advertising.

“By no means are we saying we’re not interested in advertising revenue. I think a healthy digital media business has to have multiple revenue streams. I’ve been a sports media guy for 25 years. And I have seen everything from the league sponsorship side to the big shift to programmatic. A number of digital media companies over the years have made the shift to branded content, social marketing, influencers, adtech etc to try to find a secondary revenue stream that fits well inside their business. I don’t think that any of those revenue streams take advantage of the core aspects of the publishing business, which is the users that come to you every single day.

“So I think the combination of both traditional advertising revenue, programmatic and otherwise, and an LTV-driven business model works. I think it takes advantage of the core strength that we have, which is bringing users into a great sports site from around the world. But it’s more about what we do with those users than just generating page views from them.”

The return of digital collectibles?

It isn’t just gambling revenue that is up for grabs from affiliates, either. Rich is also keen on other sectors and sees a role for digital collectibles too.

“So you have traditional categories like tickets and merchandise. I also  believe that the digital collectible space, even though it experienced an erosion a few years ago, is positioned well for growth because it’s at its low point.

“If you’re bringing in users who are interested in sports content and you collect the appropriate amount of data on them you can make the right offers too. There’s no reason why you can’t create a vibrant affiliate business in sports which really outside of the affiliate marketing companies for the sports books, no one has really accomplished.”

The nuts and bolts of LTVs

Many media businesses have talked the talk about affiliate revenue. Some have been very successful, such as Future PLC and its largely product-based deals with retailers. For some, though, it remains a roll of the dice, and they stick with display advertising, understanding that they will receive some income for their content rather than potentially receive nothing through affiliates.

Rich believes that sport is not unique in its potential for affiliate revenue. In every category of media, there’s an opportunity whether it be business, travel, mortgages or restaurants.

“When you speak to a brand marketer, you talk about your audience, how engaged they are with this great content you produce, and you try to attract a media spend on the back of that number. At the end of the day. What does that number really mean today? Everybody can say they have all these users, but what do your users do? What can you put in front of them that would be attractive to them?

“We’re not looking at conversion rates in the 10, 20, 30%. If you can get 3 to 5% of your audience to take action inside of a user base of say 40 to 50 million on a monthly basis. Your LTV or your affiliate revenue stream is just as big as your ad business. You don’t need 10%. We’re not converting 10% of our users today, but it’s already becoming 40% of our revenue. And we haven’t perfected the model quite yet.”

The influence of technology

There has been a lot of discussion about the potential of generative AI in sports content for compiling basic match reports, etc. So, is this something that Sporting News is experimenting with?

“Absolutely. If you’re not spending time thinking about it, or even acting upon it, then you could always get left behind. In this particular sector, you’re more likely to be penalised for the bets you didn’t make than rewarded for the ones you went after. So if you don’t have a hard look at AI, and try to figure out how it’s going to impact your newsroom, and what tools you can be leveraging to make your business more effective, you could end up being left behind.

“I’m not saying that you should make your entire content team AI-based. I don’t believe that that’s the case. But I think it’s about how you leverage AI both dynamically within your content, and as a research platform to make your content more authoritative. So you’re still going to need to have top-notch talent in your newsroom. They’re still going to have to have a great opinion.”

So, might we see more investment money ploughed into sports online publishing? Rich thinks that The NYT/Athletic deal doesn’t necessarily mean similar acquisitions are likely, but that businesses that make significant cash will always be attractive to investors and buyers.

“At the end of the day, sports media investors, especially on the digital side, want to see a plateau of profitability or a path to profitability. They don’t want to see reliance on a singular revenue stream because they know the ad market is volatile. And right now capital is extremely difficult to raise. When interest rates are at the level that they are today, you need to be able to show a significant return to justify investment. This is a tough market right now, and in order to be able to bring capital into a business, you have to show profitability or a path to profitability.

“A lot of businesses in sports generate a lot of revenue. There are not as many businesses as sports that make a lot of money. Right, so number one, I think that understanding where the market is moving to, and pivoting our business model towards where we think that there’s an undervalued area and a particular area to extract more value, was really important to the incoming investors.”

You can watch our full interview with Rich Routman below: