Home > NewsRelease > Spotify to Buy Bill Simmons’ The Ringer for an Estimated $196M
Spotify to Buy Bill Simmons’ The Ringer for an Estimated $196M
Kathleen Greenler Sexton --- Subscription Expert Kathleen Greenler Sexton --- Subscription Expert
For Immediate Release:
Dateline: Boston , MA
Friday, February 14, 2020


Acquisition will help Spotify grow its podcast catalog.

Spotify to Buy Bill Simmons? The Ringer for an Estimated

Source: Spotify

After sharing its fourth quarter and 2019 year end financials, streaming audio platform Spotify announced its intent to acquire Bill Simmon’s The Ringer. This acquisition will help Spotify expand its content catalog with sports and pop culture podcasts and The Ringer website, as well as reach new audiences. Spotify did not disclose terms of the deal, but in its SEC filing, the company agreed to pay between $141 million and $196 million, in U.S. dollars, for The Ringer. The acquisition is expected to close during the first quarter of 2020.

"We look forward to putting the full power of Spotify behind The Ringer as they drive our global sports strategy,” said Dawn Ostroff, Spotify’s chief content officer. “As we set out to expand our sports and entertainment offerings, we wanted a best-in-class editorial team. Bill Simmons is one of the brightest minds in the game and he has successfully innovated as a writer and content creator across mediums and platforms. The Ringer's proven track record of creating distinctive cultural content as well as discovering and developing top tier talent will make them a formidable asset for Spotify."

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Bill Simmons, a former ESPN personality, started The Ringer in 2016. The Ringer produces 30+ podcasts from Simmons, staff and other personalities including David Chang and Larry Wilmore. In 2018, The Ringer launched Ringer Films to produce short- and long-form, non-scripted programming. It has also launched Ringer Books.

“Spotify has the unique ability to truly supercharge both content and creator talent across genres,” said Simmons. “We spent the last few years building a world-class sports and pop culture multimedia digital company and believe Spotify can take us to another level. We couldn’t be more excited to unlock Spotify’s power of scale and discovery, introduce The Ringer to a new global audience and build the world’s flagship sports audio network. We’re joining one of the best media companies in the world. It’s an incredible day for us.”

In addition to this announcement, Spotify released its fourth quarter and 2019 year-end financials. Here are highlights from that earnings report.

-       Total revenue grew 24% year-over-year to $2.0 billion.

-       Premium revenue grew 24% to $1.76 billion, and ad-supported revenue grew 23% to $235.2 million.

-       Average revenue per user was $5.04, representing a 5% decrease, primarily due to an extended free trial period.

-       Gross margin was 25.6% in the fourth quarter. Premium gross margin was 26.9%, and ad-supported gross margin was 15.4%.

-       Operating expenses were $597 million, an 80% increase year-over-year.

-       The company now has more than 700,000 podcast titles, and more than 16% of monthly active users engage with podcast content. Consumption of podcasts grew 200% in the fourth quarter.

-       The company has 271 monthly active users, a 31% increase year-over-year.

-       Spotify has grown to 124 million premium subscribers, a 29% increase year-over-year, which exceeded the company’s forecast. This is the highest net add for a quarter to date.

-       Spotify for Artists, the company’s platform built specifically for artists, now has more than 500,000 monthly active users and creators.

-       The company ended the year with $1.95 billion in cash and cash equivalents, restricted cash and short-term investments.

Spotify provided the following guidance for the first quarter of 2020:

-       Total monthly active users between 279 million and 289 million

-       Total premium subscribers between 126 million and 131 million

-       Total revenue between $1.85 billion and 2.07 billion

-       Gross margin between 23.5% and 25.5%

-       Operating loss between $70.4 million and $124.6 million

Insider Take:

Though Spotify continues to report losses, it also continues to grow, particularly with acquisitions like The Ringer and Gimlet Media, another podcasting company. With 16% of Spotify’s audience listening to podcasts, it has plenty of room for growth in that area. Also, because of revenue diversification (ad revenue, premium subscriptions, revenue from artists and creators), Spotify has set itself up to be successful for the long haul. Its marketing tactics also seem to be paying off. Last fall, for example, Spotify gave away Google Home minis (retail value of $49) to premium subscribers. We expect 2020 to be a strong one for Spotify as it inches toward profitability.

Dana Neuts is Subscription Insider's Senior Staff Writer, covering our daily subscription news as well as member features, case studies, and reports.  

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