For OffBall, aside from the expanded scale, the primary appeal of the partnership is the resources on hand at Togethxr, which include its sales, business development, and operations teams, according to cofounder Adam Mendelsohn. Going forward, OffBall will be able to use those capabilities as its own, providing it manpower without having to fundraise.
“The challenge when you raise the money is that you put yourself under immense pressure to scale revenue, and that leads to a slippery slope,” Mendelsohn said. “We’re trying to figure out if there’s a different way to do that.”
The tie-up is explicitly not a merger, but Togethxr will receive a minority equity stake and revenue from OffBall tied to the performance of the partnership, according to a person familiar with the matter.
The deal structure, which allows both firms to grow without raising any new capital, reflects the new logic of media entrepreneurship. No longer do outlets raise heaps of capital, hire outlandishly at the jump, and hope to make it up with scale—nobody other than The Messenger, that is.
Instead, in this new era of niche, bootstrapped outlets, publishers focus on operating as inexpensively as they can while building up direct, engaged audiences through one-to-one channels like newsletters. Video and social media, meanwhile, act as top-of-funnel devices that reach broad audiences, which can then be funneled into stickier channels or monetized through the more attractive CPM rates those channels command.
The editorial focus of the two outlets, both of which offer a more cost-effective approach for tapping into sports fandom, also reflects an emerging workaround to the prohibitively high price of original content production.
As publishers face downward revenue pressures, both institutional outlets, like The Washington Post, which recently shuttered its sports bureau, and startups are looking for ways to cover popular topics on smaller budgets. This phenomenon is hardly restricted to sports—lifestyle coverage has a particularly hard time justifying its ROI nowadays, hence the coming culling at Condé Nast—but it has proven material in the space, given how expensive it is to bankroll beat reporters or participate in sports rights.
Steadily building up engagement with a free product with an opted-in audience has become the new first step for digital media upstarts. If the partnership between OffBall and Togethxr proves fruitful, perhaps such mutually beneficial tie-ups might become more commonplace as well.
Talking Heds
Consumer Rapport (Exclusive): The 90-year-old publisher Consumer Reports unveiled a $3 million brand marketing campaign on Monday. The campaign is part of a broader push from the outfit to expand its base of 5 million paying members. The creative, which revolves around the tagline “We Never Stop Questioning,” aims to underscore the nonprofit’s consumer advocacy efforts, which have exposed the high levels of lead in certain protein powders and led to the recall of defective child car seats.
Surprisingly, Consumer Reports generates around 70% of its $266 million in revenue directly from memberships, with affiliate revenues making up the smallest line of its business—a stark contrast from peers like Wirecutter and The Strategist, for whom affiliate revenue is the primary play. Last year, it spent $33 million buying the products it tests, which it later auctions off to staff and their families, according to chief marketing officer Khalid El Khatib. Despite this high cost of content, the non-profit broke even in its most recent financial filings.
