As expected, SiriusXM has acquired podcasting platform Stitcher. But it’s done so for even more money than predicted.
Last week, the Wall Street Journal got the scoop that Sirius was set to buy Stitcher from media company E.W Scripps, for a price in the region of $300m.
Today (July 13), SiriusXM confirmed the deal. It has agreed to make a cash payment of $265 million to Scripps, along with a potential $60 million in additional contingent payments based on Stitcher achieving certain financial metrics in 2020 and 2021.
The transaction is expected to close in the third quarter of 2020, subject to receipt of required regulatory approvals.
The Stitcher app aggregates over 350,000 shows and over 7 million episodes for podcast listeners. It’s free, with a $4.99-per-month Premium ad-free subscription offering.
Stitcher also commissions/producers its own ‘Originals’ podcasts – such as Freakonomics Radio – and acts as an ad sales partner to third-parties.
Sirius said the buyout would “deepen [our] position in podcasting, the fastest-growing sector in the audio entertainment ecosystem”.
“With Stitcher, we will expand our digital audio advertising presence and look to generate new ways for creators to find and connect with their audiences.”
Jim Meyer, SiriusXM
It added: “With the acquisition, SiriusXM’s combined properties will contain the largest addressable audience in the U.S. across all categories of digital audio – music, sports, talk, and podcasts. The transaction will also further extend the substantial reach of SiriusXM in the digital audio ad marketplace. The SiriusXM and Pandora owned-and-operated digital platforms, combined with the company’s exclusive ad sales arrangement with SoundCloud for the U.S., and the Stitcher and Midroll networks that are subject to the agreement, will reach over 150 million listeners.
“Upon completion of the transaction, SiriusXM will be better positioned to advance the podcast ad market and help solve some of its critical challenges through precision targeting, ad efficiency, and improved measurement capabilities via a streamlined ad marketplace.”
Today’s news came on the same day that the IAB announced that US-based podcast revenues reached $708.1m last year, and are expected to get close to $1bn this year.
“The addition of Stitcher is an important next step as we continue to develop and strengthen our offering in the fast-growing podcasting market,” said Jim Meyer, Chief Executive Officer of SiriusXM. “With Stitcher, we will expand our digital audio advertising presence and look to generate new ways for creators to find and connect with their audiences. Stitcher has a talented team with deep experience in the podcast space, and we look forward to working with them to better meet the needs of creators, advertisers, and listeners.”
Through its Midroll Media advertising network, Stitcher acts as a sales and marketing representative to connect advertisers and podcasts based on the advertiser’s desired target audience.
Guggenheim Securities, LLC is serving as financial advisor to SiriusXM and Weil, Gotshal & Manges LLP is serving as its legal counsel.Music Business Worldwide