SiriusXM has revealed its $325 million acquisition of Stitcher. Though SIRI stock fell in response, today its price is increasing.
SiriusXM (NASDAQ: SIRI) has announced its recent purchase of podcast company, Stitcher. On July 13, SiriusXM signed an agreement with Stitcher’s parent company, E.W. Scripps, worth $325 million. At that price, the purchase is more than double of Scripps’ total investment in podcasting over the last five years.
According to reports, E.W. Scripps will receive $265 million in upfront cash payments, with two earnouts of $30 million each, based on SiriusXM’s financial results in 2020 and 2021. The deal will help SiriusXM expand further into podcasting.
Speaking on the benefit of the acquisition, SiriusXM CEO Jim Meyer said:
“The addition of Stitcher is an important next step as we continue to develop and strengthen our offering in the fast-growing podcast market.”
Regardless of the recent move, yesterday SiriusXM stock fell 1.07% from its previous close at $5.59. SiriusXM stock fell 7.95% over the last month, and more than 22% in its year-to-date performance. However, today, SIRI stock is 1.34% up, trading at 5.66%.
Speaking on ways to use Stitcher for growth, SiriusXM stated plans to expand the advertising presence of its digital audio offerings. The company also hopes to initiate new techniques to help podcast creators “find and connect with their audiences.” Furthermore, Meyer added that SiriusXM is ready to work with the talented and skilled team at Stitcher, to meet the needs of creators, advertisers, and listeners.
E.W. Scripp’s Stitcher Acquisition
Founded in 2014, Stitcher is known for three podcast business lines. First is its Midroll Media advertising network that services almost 104 million listeners every month. Also, Stitcher owns a free mobile app where listeners stream the latest podcasts on news, sports, talk, and entertainment. It also offers a premium service without ads to its users at $4.99 each month. Finally, Stitcher creates original podcasts and operates podcast networks that target specific genres and audiences.
Some of the top Stitcher podcasts include Freakonomics Radio, SuperSoul Sunday with The Oprah Winfrey Network, and WTF with American stand-up comedian Marc Maron.
Before now, Scripps acquired Midroll in 2015 for $55 million. A year later, it also bought the Stitcher app for $4.5 million. As of 2019, Scripps’ revenue increased to $72.5 million.
SiriusXM Acquisitions Before Stitcher
Back in 2018, SiriusXM paid $3.5 billion to acquire music streaming service Pandora. With this acquisition, SiriusXM planned to leverage some of its services unto Pandora to “create unique audio packages.”
Last month, SiriusXM announced its plan to acquire Simplecast, a podcast management platform that helps podcasters publish and manage their content. The Simplecast platform is known for its leading content management, audience analytics, and dynamic audio toolset. At the time, SiriusXM said the acquisition would create an end-to-end solution for creators to earn revenue from their podcasts.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
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