Spotify spent around $400 million in 2019 to acquire podcast companies Gimlet, Parcast and Anchor.
Spotify is bulking up its podcasting business with a definitive deal to acquire Bill Simmons’ The Ringer, which will add a robust slate of sports and pop culture audio shows to its growing podcasting portfolio.
Terms of the deal for the four-year-old The Ringer were not disclosed. Spotify said it expects the deal, designed to boost its sports vertical, to close in the first quarter.
“With this acquisition, Spotify continues to deliver against its goal to become the world’s leading audio platform,” the company said. “We look forward to putting the full power of Spotify behind The Ringer as they drive our global sports strategy.”
In a call with investors on Wednesday morning, Spotify CEO Daniel Ek said, “I think we bought the next ESPN” and described The Ringer’s audience as “highly loyal.”
The purchase gives Spotify, which ended 2019 with 124 million paid subscribers and 271 million total active monthly users, ownership of culture website The Ringer as well as a 30-plus podcast network that includes shows on sports (flagship The Bill Simmons Podcast, The Ringer NBA Show), food (The Dave Chang Show, House of Carbs) and entertainment (The Watch, Binge Mode). The largely unscripted, chat-style shows will serve as a complement to the highly produced scripted and narrative nonfiction podcasts that Spotify already owns through its 2019 acquisitions of Gimlet and Parcast. The Ringer also has production shingle Ringer Films through which Simmons produces documentaries like Andre the Giant for HBO.
All 90 Ringer employees are expected to join Spotify and the website will continue to operate. At this time, Spotify doesn’t plan to change the exclusivity of The Ringer’s podcasts and shows it makes for other podcast providers, including subscription service Luminary, will continue on those platforms.
“As we set out to expand our sports and entertainment offerings, we wanted a best-in-class editorial team,” Spotify content chief Dawn Ostroff said in a statement. “Bill Simmons is one of the brightest minds in the game and he has successfully innovated as a writer and content creator across mediums and platforms. The Ringer’s proven track record of creating distinctive cultural content as well as discovering and developing top-tier talent will make them a formidable asset for Spotify.”
Added Simmons: “Spotify has the unique ability to truly supercharge both content and creator talent across genres. 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. We couldn’t be more excited to unlock Spotify’s power of scale and discovery, introduce The Ringer to a new global audience and build the world’s flagship sports audio network.”
Spotify sees podcasts as a way to expand beyond its music roots. The company spent around $400 million to acquire three podcast companies last year and announced, via a February 2019 letter from CEO Daniel Ek, that “audio — not just music — would be the future of Spotify.”
Since then, the company, under the leadership of Ostroff, has invested in its internal podcast operations, hiring television veterans like Liz Gateley to build out a pipeline of original shows from such talent as Kevin Bacon, Jordan Peele, Paul Feig and Mark Wahlberg. It also has inked deals to make several podcasts, including comedy series Last Podcast on the Left, exclusive to its platform.
The investment has paid off. Podcast consumption hours were up 200 percent year-over-year during the final three months of 2019, the company also revealed Wednesday. The company said podcasts were helping drive increased overall engagement and retention to its product. More than 16 percent of Spotify’s monthly active users now engage with podcast content.
The Ringer was among those making an exclusive show for Spotify. Daily shortform series The Ringer’s Hottest Take has been streaming on Spotify since September. The companies then began talking about deepening their partnership via a sale. Negotiations ultimately came down to the eleventh hour heading into Spotify’s fourth quarter earnings on the morning of Feb. 5.
Simmons launched The Ringer in 2016 with backing from HBO after he left ESPN, where he started the website Grantland.
Georg Szalai in London contributed to this report.