In early July, The Wall Street Journal hinted that The E.W. Scripps Co. was nearing a deal to spin its Stitcher podcasting unit.
On July 13, the rumors became reality, as Scripps entered into an agreement with SiriusXM to sell its podcast business for $325 million.
On October 19, the multi-million deal was completed.
The sale price includes $265 million of cash upfront, with an earnout of up to $30 million based on 2020 financial results and paid in 2021 and an earnout of up to $30 million based on 2021 financial results and paid in 2022.
The Stitcher company includes the Midroll advertising rep firm; owned-and-operated podcast networks including the comedy-focused Earwolf; and the Stitcher podcast listening platform.
An early entrant into podcasting, Scripps acquired Midroll in 2015 for $55 million and the Stitcher app in 2016 for $4.5 million. Since then, Stitcher has been a leader in the fast-growing podcast industry, growing revenue at a compound average growth rate of 52% from 2016-2019. Stitcher’s 2019 revenue was $72.5 million.
LionTree Advisors acted as exclusive advisor to Scripps in the Stitcher sale process, and BakerHostetler served as legal counsel.
The opportunity for Stitcher and its employees to join a large pure-play audio company ensures it will expand upon its success, Scripps President and CEO Adam Symson believes.
“This sale is consistent with Scripps’ track record of growing businesses that capitalize on the evolution of consumers’ media habits and then unlocking shareholder value through spinoffs, exits and continued organic growth,” Symson said in July. “Over and over, this strategy has proven effective as well as profitable for the company and its shareholders. We are firmly committed to our national businesses and are enthusiastic about the opportunities we see ahead in over the top and over the air television.”