SiriusXM, the leading audio entertainment company in the U.S., announced today that it has entered an agreement with The E.W. Scripps Company (NASDAQ: SSP) to acquire Stitcher, a pioneer in podcast production, distribution, and ad sales. The transaction will advance and deepen SiriusXM’s position in podcasting, the fastest-growing sector in the audio entertainment ecosystem.
With the acquisition, SiriusXM’s combined properties will contain the largest addressable audience in the U.S. across all categories of digital audio – music, sports, talk, and podcasts. The transaction will also further extend the substantial reach of SiriusXM in the digital audio ad marketplace. The SiriusXM and Pandora owned-and-operated digital platforms, combined with the company’s exclusive ad sales arrangement with SoundCloud for the U.S., and the Stitcher and Midroll networks that are subject to the agreement, will reach over 150 million listeners. Upon completion of the transaction, SiriusXM will be better positioned to advance the podcast ad market and help solve some of its critical challenges through precision targeting, ad efficiency, and improved measurement capabilities via a streamlined ad marketplace.
“The addition of Stitcher is an important next step as we continue to develop and strengthen our offering in the fast-growing podcasting market,” said Jim Meyer, Chief Executive Officer of SiriusXM. “With Stitcher, we will expand our digital audio advertising presence and look to generate new ways for creators to find and connect with their audiences. Stitcher has a talented team with deep experience in the podcast space, and we look forward to working with them to better meet the needs of creators, advertisers, and listeners.”
Stitcher creates original podcasts, operates multiple content networks that each target a specific genre and audience, and provides podcast ad agency services for leading shows. Through its Midroll Media advertising network, Stitcher acts as a sales and marketing representative to connect advertisers and podcasts based on the advertiser’s desired target audience. Stitcher also owns and operates a popular mobile app listening platform where consumers can stream the latest podcasts ranging from news, sports, talk, and entertainment shows on-demand and free of charge. Users can pay for Stitcher’s monthly or annual Premium subscription, which gives them access to premium content including exclusive, ad-free, and bonus podcast episodes, along with 300+ comedy albums.
Top Stitcher podcasts include Freakonomics Radio, My Favorite Murder, How Did This Get Made?, SuperSoul Sunday from The Oprah Winfrey Network, Office Ladies, Conan O’Brien Needs a Friend, Literally! with Rob Lowe, LeVar Burton Reads, Comedy Bang! Bang!, and WTF with Marc Maron.
Upon closing of the transaction, SiriusXM will be the premier full-service platform for podcast creators, publishers, and advertisers – combining the largest digital audio salesforce with a leading podcast ad network. Coming on the heels of SiriusXM’s recent acquisition of podcast management and analytics platform Simplecast, the addition of Stitcher, alongside industry-leading ad tech and monetization platform AdsWizz, will expand the company’s existing suite of podcast hosting, analytics, insights, and marketplace offerings. Additionally, creators will benefit from the transaction through enhanced production, marketing, and promotion capabilities to drive further listening, engagement, and monetization.
Details of the Transaction
Under the terms of the asset purchase agreement, at the closing, SiriusXM will make a cash payment of $265 million to Scripps. The agreement provides that SiriusXM will potentially make up to $60 million in additional contingent payments based on Stitcher achieving certain financial metrics in 2020 and 2021.
The transaction is expected to close in the third quarter of 2020, subject to receipt of required regulatory approvals and the satisfaction of other customary closing conditions.
Guggenheim Securities, LLC is serving as financial advisor to SiriusXM and Weil, Gotshal & Manges LLP is serving as its legal counsel.
Sirius XM Holdings Inc. (NASDAQ: SIRI) is the leading audio entertainment company in the U.S. and the premier programmer and platform for subscription and digital advertising-supported audio products. Pandora, a subsidiary of SiriusXM, is the largest ad-supported audio entertainment streaming service in the U.S. SiriusXM and Pandora together reach more than 100 million people each month with their audio products. SiriusXM, through Sirius XM Canada Holdings, Inc., also offers satellite radio and audio entertainment in Canada. SiriusXM’s recent acquisition of podcast management and analytics platform Simplecast alongside industry-leading ad tech subsidiary AdsWizz expands the company’s suite of podcast hosting, analytics, insights, monetization, and marketplace offerings. In addition to its audio entertainment businesses, SiriusXM offers connected vehicle services to automakers and directly to consumers through aftermarket devices. For more about SiriusXM, please go to: www.siriusxm.com