SiriusXM confirmed Monday it will acquire podcasting company Stitcher for up to $325 million in the industry’s largest podcasting deal yet.
The acquisition will give the satellite radio giant, home of such programs as the “The Howard Stern Show,” a greater foothold in podcasting. The company said it would pay $265 million in cash for Stitcher and potentially up to $60 million more if Stitcher meets certain financial metrics this year and in 2021.
The deal will increase SiriusXM’s reach to more than 150 million listeners across all its properties. Stitcher creates podcasts and links podcasters to advertisers through its Midroll Media advertising network. Stitcher also operates its own app.
Stitcher podcasts include “Conan O’Brien Needs a Friend” and “Comedy Bang! Bang!” The company is based in New York but has offices in Los Angeles and San Francisco.
“With our team’s collective expertise in digital audio, analytics and ad tech, plus Stitcher’s deep experience in podcasting, I see significant opportunities ahead,” CEO Jim Meyer wrote in a memo to his staff Monday. “Together, we can create a transformative one-stop shop to better meet the needs of podcast creators, publishers and advertisers — while also providing listeners with new ways to find and connect with great shows.”
The company is bolstering its presence as rivals such as Spotify and iHeartRadio have beefed up their investments in the space. In 2018, iHeartRadio acquired Atlanta-based podcast publisher Stuff Media for $55 million, and last year, Spotify bought several podcast-related companies including New York-based Gimlet Media for around $230 million.
SiriusXM in recent years has made several acquisitions, including its 2018 purchase of streaming service Pandora in an all-stock transaction valued around $3.5 billion. The company also recently acquired podcast management firm Simplecast.
Last year, Walt Disney Co.’s Marvel Entertainment agreed to supply exclusive podcasts for SiriusXM’s satellite radio and streaming services.
Stitcher was acquired by E.W. Scripps Co. in 2016 for $4.5 million.
Last year, Stitcher had $72.5 million in revenue, up 42% from 2018, because of growth in advertising, E.W. Scripps Co. said in its annual report.
Scripps operates 60 television stations during a challenging period for the industry. Broadcast networks have been hit hard by the COVID-19 pandemic.
Scripps President and CEO Adam Symson said in a statement that Stitcher’s sale is part of Scripps’ track record of growing successful businesses and then selling them.
“Over and over, this strategy has proven effective as well as profitable for the company and its shareholders,” Symson said.
The deal is expected to close in the third quarter.
SiriusXM stock rose slightly at 0.4% on Monday to $5.72 a share, while E.W. Scripps stock rose nearly 7% to $9.50 a share on the Nasdaq.
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