Spotify disclosed that it will pay upwards of $196 million for The Ringer, the podcast and media company founded by Bill Simmons.
The streaming music and audio company said it entered into a deal to acquire Bill Simmons Media Group for between €130 million and €180 million in cash (approximately $141 million to $196 million at current exchange rates), subject to closing adjustments, a portion of which is deferred, according to a company SEC filing Thursday. The deferred payouts are contingent on performance and Simmons and certain other Ringer execs remaining with Spotify. The deal is expected to close in the first quarter of 2020.
Spotify is acquiring The Ringer, founded by ESPN alum Simmons in 2016, as part of bulking up its portfolio of podcasts. The Ringer produces more than 30 podcasts from Simmons and the startup’s staffers as well as personalities including David Chang and Larry Wilmore.
The acquisition of The Ringer will bring “highly loyal sports and culture fans to the platform,” Spotify CEO Daniel Ek said on the company’s Feb. 5 earnings call. “The trend that we’re investing in is that radio is moving online,” he said. Apparently referencing Simmons’ ESPN background, Ek added, “What we really did with The Ringer, I think, is we bought the next ESPN.”
In 2019, Spotify acquired three podcast companies — Gimlet Media, Anchor and Parcast — paying some $393 million for them, with additional payment incentives over four years contingent on employment, according to regulatory filings. The Gimlet deal was worth about $189 million (€172 million) plus up to $44 million in incentives; Anchor was $150 million (€136 million) plus $22 million in incentives; and Parcast was $54 million (€49 million) plus up to $11 million in incentives.
In announcing record quarterly Premium subscriber adds in Q4, Spotify said it would continue to invest in podcast content and infrastructure and claimed podcast listening hours grew nearly 200% in the last three months of 2019.
Spotify, in its filing Wednesday, also said that in the first few weeks of 2020 it signed license agreements with “certain music labels and publishers and podcast agreements with creators,” which comprise minimum guarantee and spending commitments of approximately $200 million (€186 million) over the next three years.
The Ringer Podcast Network’s podcasts include consistently top-ranking shows “The Bill Simmons Podcast,” “The Rewatchables” and “The Ryen Russillo Podcast.” The company’s original video content includes “NBA Desktop” and has included after-shows for HBO’s “Game of Thrones” and “Big Little Lies” started streamed exclusively on Twitter.
While at ESPN, Simmons built up a sizable online following as an on-air commentator and also as the head of the Grantland news and commentary website. In May 2015, ESPN ousted Simmons after he engaged in public clashes with higher-ups.