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Axios Agrees to Sell Itself to Cox Enterprises for $525 Million

  • August 08, 2022

Axios is selling at roughly five times its projected 2022 revenue of more than $100 million, according a person who was familiar with a presentation that Axios made to its board. The company was profitable for the last three years but is not expected to be profitable in 2022, partly owing to investments in HQ, its communications software division, the person said.

In an interview, Mr. VandeHei said the company’s founders had decided to sell now because they found a buyer that was committed to journalism and that would pay a fair price, allowing investors that backed Axios early, including NBCUniversal and Emerson Collective, to receive a substantial return.

Mr. VandeHei said it was also important to him that any deal allowed the management team to remain in place, because he was not planning to step aside anytime soon.

“Not a chance,” he said. “This is my life’s work. It’s my passion. I would do it for free.”

The deal provides a coda of sorts for Axios’s founders, who left Politico in 2016 amid a tug of war over the future of that company, which Mr. VandeHei also helped found. He, Mr. Allen and Mr. Schwartz started Axios the next year. Politico went on to sell itself to the German publishing conglomerate Axel Springer for $1 billion last year.

The deal price tops the $400 million or so valuation that Axios discussed with Axel Springer last year, according to three people familiar with the matter. After those talks, Axios raised another funding round, led by Cox, that valued the company at $430 million.

Cox Enterprises is not buying out HQ, which Axios is spinning out into a separate company. Mr. Schwartz will be chief executive of that company, and Cox will take a minority stake, with Mr. VandeHei serving as chairman, a person with knowledge of the deal said.

The deal to acquire Axios harks back to the media roots of Cox Enterprises, a family-owned privately held company based in Atlanta that generates most of its revenue from its cable and broadband businesses. The company traces its beginnings to 1898, when James Middleton Cox bought what is now The Dayton Daily News for $26,000. In 1939, Mr. Cox purchased the newspaper that would eventually become The Atlanta Journal-Constitution, and the company still owns both publications.

“It’s a big part of who we are and what we do,” Mr. Taylor said. “We’ve been in the news business for 124 years, and this speaks to the legacy our grandparents left us.”

Cox Enterprises, which already owned a minority stake in Axios, is putting $25 million of cash on its balance sheet to fund the company’s growth. Mr. VandeHei said Axios planned to build a series of subscription products, similar to those offered by Politico Pro, on topics including technology, politics and legislative policy.

Axios also plans to continue starting more regional editions, which already exist in 24 cities including Philadelphia, Des Moines and Nashville. Mr. VandeHei said the company aimed to be in at least 100 cities in the coming years.

“Hopefully, with Politico first, and Axios today, we have shown a way for serious journalism to thrive in the digital era,” Mr. VandeHei said. “This country so desperately needs it.”

Axios’s next big test will be how its coverage of the midterm elections and the 2024 presidential election cycle stacks up against some of its deeper-pocketed competitors. Mr. VandeHei said the company planned to hire additional reporters for the campaign, noting that quality coverage was more about finding experienced journalists than having “a 100 boots on the ground.”

Mr. VandeHei said he remained sanguine about the prospects for the digital-media sector despite the turmoil afflicting the industry. He pointed to business-focused outlets like The Information and Morning Brew, which have cultivated loyal readers in a difficult market.

“The lesson of the digital era: Chase fads, fantasy and clicks, you fade or famish,” Mr. VandeHei said. “Chase a loyal audience with quality information, you can flourish.”

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