Spotify announced Wednesday plans to acquire The Ringer, a sports media company founded by former ESPN personality Bill Simmons.
Why it matters: 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.
Details: This is Spotify's first major investment in a podcast content company. Deal terms were not disclosed.
- Content: The move will help Spotify expand into global and local sports content. The Ringer currently owns and produces more than 30 podcasts, including its two most popular series, “The Bill Simmons Podcast” and "The Rewatchables." The company has leveraged some of its strong titles to broker other video and film deals.
- Employees: All of The Ringer's roughly 90 employees are expected to join Spotify. No layoffs are planned with the deal.
- Exclusivity: The Ringer shows that are currently exclusive on podcast platforms like Luminary and Pandora will remain exclusive. The programs available on all podcast platforms will be available everywhere for the foreseeable future. There may be some podcasts from The Ringer that become Spotify exclusives in the future, although that's not expected to be the case for the most part.
The big picture: This is Spotify's fourth major investment in a podcasting company in the past year. Its series of investments began last February with technology and production, and have more recently transitioned to content.
- Last year, Spotify paid $340 million to acquire Gimlet, one of the fastest-growing podcast production studios, and Anchor, among the fastest-growing podcast production and hosting studios.
- It later spent $56 million to acquire Parcast, a story-based podcast studio.
- Spotify also recently announced a partnership with the Wall Street Journal to co-produce a podcast called "The Journal."
Be smart: While the new deal terms were undisclosed, it's hard to imagine that Spotify didn't pay at least tens of millions of dollars. The Ringer's podcast revenues surpassed $15 million in 2018 and the company says it's profitable.
- Last year, Spotify said it would invest at least $500 million to boost its podcast business. Its purchases of three studios last year totaled about $400 million, meaning the company had room financially to make more acquisitions within its initial investment commitment range.
What they're saying: "We spent the last few years building a world-class sports and pop culture multimedia digital company and believe Spotify can take us to another level," Simmons said in a statement.
- "We look forward to putting the full power of Spotify behind The Ringer as they drive our global sports strategy," said Dawn Ostroff, chief content officer at Spotify.
What's next: The deal is expected to close in the first quarter of this year.
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