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Spotify Reportedly In Early Talks To Acquire Bill Simmons’ Ringer Network

This article is more than 4 years old.

Over the weekend, the Wall Street Journal reported that Spotify, which is looking to break into the sports podcast game, is in early talks with Bill Simmons’ latest sports and pop culture project, The Ringer, about a potential acquisition. Courtesy of industry publication, Front Office Sports, we learned some more details about Simmons’ asking price, which is reportedly in the neighborhood of $200 million.

Since his days as the “Boston Sports Guy,” Simmons has maintained a certain level of cultural cachet and resonance with his audience that he has been able to parlay into an incredibly successful career. Many a sports fan will remember that Simmons was one of the early mover/adopters of the podcast medium and was also the brains behind ESPN’s “30 for 30” franchise as well as his now-defunct first foray into creating a sports and pop culture brand, Grantland. In the wake of his 2015 split from the ESPN “mother ship”, (as past ESPN defectors such as Dan Patrick like to call it), Simmons set out to replicate what he had built and ultimately lost at ESPN. The irreverent sports columnist quickly landed on his feet, inking a deal with HBO that would enable him to continue to develop and produce sports documentaries in the mold of “30 for 30”, as well as another stint in front of the camera, hosting a short-lived sports talk show called “Any Given Wednesday.”

Nevertheless, Simmons’ mediums of choice were always the written and spoken word, something he returned to in 2016 with the launch of The Ringer, which most people in the industry saw as a more independent reincarnation of Grantland, a perception that only grew when Simmons decided to scoop up most of Grantland’s former staff for his new venture. In addition to his traditional “bread and butter” of sports and pop culture, Simmons used the timing of the election year to incorporate politics into The Ringer and in the process helped launch the media careers of a then-relatively unknown troika of former Obama staffers, Jon Favreau, Tommy Vietor, and Jon Lovett, who would later go on to create a hot media startup of their own in Crooked Media. No one will dispute Simmons’ ability to be a curator of culture who seems to always have his finger on the pulse of what will resonate with his audience but as a first-time founder of a company, he was not immune to the growing pains most similarly-situated people experience.

One of the most notable growing pains was a lack of expertise around technology and monetization of a media entity like The Ringer, which prompted Simmons to partner with Vox Media as a way to enable him to focus on what he does best, cranking out quality content. Most recently, the sports and pop culture media destination came under scrutiny for the way it treats its’ employees, as The Ringer’s staff ultimately made the decision to unionize in order to secure expanded benefits and pay from management. However, it is important to note that the movement towards unionization is something that is happening across digital media writ-large.

While The Ringer is replete with some incredibly talented writers, it became clear at a relatively early stage that their core competence and ultimately the most valuable part of their business was (and is) podcasting. With the “tent pole” of his namesake podcast, The Ringer has built out a robust network of shows that live both on The Ringer Podcast network and exclusive distribution deals with paywall-ed networks like Luminary. The Ringer’s Podcast network apparently generates a whopping 100 million downloads per month, generating about $15 million in revenue per year for the company.

In terms of the potential acquisition, given its’ core audio business and it’s stated intention(s)/aspirations in the sports podcast space, it makes sense for Spotify to acquire the podcast business but it’s tough to see how the editorial side would fit into that equation outside being a promotional vehicle for the podcasts. Moreover, $200 million seems like a pretty substantial premium to pay for a company whose most lucrative asset only generates $15 million/year. However, for Spotify the premium could be worth it as it represents an arbitrage play over the price of paying music royalties in perpetuity. The real variable in this deal is what happens to the talent. Simmons and The Ringer are virtually inseparable in the eyes of the sports consuming public so any acquisition would likely require Spotify to retain Simmons for several years, perhaps under a separate (and likely expensive) talent contract. Locking up Simmons seems like a prerequisite for any deal but outside of those who are directly involved with the podcasting side of the business, a significant percentage of the recently-unionized staff will probably become expendable.

Finally, with other sports media entities like Barstool Sports reportedly up for sale, it will be interesting to see where the proverbial chips fall when it comes to The Ringer’s $200 million asking price. If there’s one thing we know for sure, Spotify is willing to pay a premium to expand its’ podcasting business. Whether that will still hold true in this case remains to be seen but in this “wild west” world of podcast acquisitions, anything seems possible.

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