Axios Will Expand Local Journalism After Selling To Cox Media For $525 Million - Forbes

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Topline

Popular news website Axios is being sold to Cox Enterprises, the companies said Monday, in a deal that reportedly values the only five-year-old outlet at $525 million, representing a rare win for a digital media company.

Key Facts

Axios was founded in 2016 by three former Politico journalists Jim VandeHei, Mike Allen and Roy Schwartz, who will remain at the helm after the acquisition, according to Axios.

The deal includes a $25 million investment into Axios’ journalism that will allow the outlet to continue expanding its offering of news products at both the national and local levels.

Cox chairman and CEO Alex Taylor said the opportunity to expand the company’s local news reach was “a big part of this investment,” according to Axios.

The deal does not include Axios’ communications software division, Axios HQ, which will pivot to become a stand-alone company led by Axios President Roy Schwartz, although Cox will become the sole minority investor.

VandeHei told the New York Times, which first reported the sale, that Axios decided to sell because Cox was committed to the company’s journalism and agreed to pay a fair price, which would allow early Axios investors a considerable return on their investment.

What To Watch For

Axios expanding its footprint into local news coverage. Axios Local operates in 24 local cities with plans to expand its coverage to 6 more by the end of the year, according to the company. VandeHei told the New York Times that Axios’ goal was to be established in at least 100 cities in the coming years. Local news coverage has declined over the past two decades, with more than 1,800 local newspapers shuttering across the U.S. since 2004.

Tangent

Axios is one of only a few digital media companies that have sold for more than half a million dollars over the past decade, as the digital advertising market has been overtaken by tech companies. Other examples include Politico, which sold for about $1 billion to a German publisher last year and The Athletic, the sports outlet that the New York Times purchased earlier this year for $550 million.

Key Background

Since Axios’ news website launched in 2017, it quickly became a popular destination for politics news with its short, to-the-point online stories and newsletters that utilize bullet points. It scaled quickly by covering other subjects like business and tech, and launching its local news division that covers cities like Chicago, Austin, Denver and Boston. Axios reportedly projects it will reach $100 million in revenue this year.