SIRI Sirius XM Holdings Inc

By Anne Steele 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 14, 2020).

Sirius XM Holdings Inc. said it has agreed to buy E.W. Scripps Co.'s Stitcher Inc. podcasting unit for $265 million in cash.

The satellite-radio giant's foray into the rapidly growing podcasting industry follows similar moves by media and technology companies, including Spotify Technology SA and iHeartMedia Inc. Sirius said it could pay up to $60 million more if Stitcher achieves certain financial metrics in 2020 and 2021.

The Wall Street Journal last week reported that the two companies were nearing a deal.

Sirius said the transaction, expected to close in the third quarter, would enable it to reach more than 150 million listeners.

"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," Sirius Chief Executive Jim Meyer said.

Stitcher runs a free podcast listening app and a premium $4.99 monthly service that lets subscribers listen to podcasts without ads. It owns podcast networks such as Earwolf, Stitcher Originals and Witness Docs, and its shows include "Freakonomics Radio," "SuperSoul Sunday from The Oprah Winfrey Network" and "Conan O'Brien Needs a Friend." With outside networks and shows, Stitcher distributes and sells advertising for more than 250 podcasts through its Midroll media advertising unit.

Sirius generates most of its revenue from subscriptions to its satellite-radio service but in 2018 agreed to buy internet-radio streaming company Pandora Media Inc. for $3 billion -- adding a business more reliant on advertising and with podcast aspirations of its own.

Last year, Sirius signaled its intent to expand its podcast business with a deal in which Walt Disney Co.'s Marvel Entertainment is creating exclusive podcasts for the company's satellite-radio and streaming services.

U.S. ad revenue from podcasts rose an estimated 42% to $678.7 million last year, according to the Interactive Advertising Bureau, and is projected to rise to $863.4 million this year and exceed $1 billion by 2021.

Scripps bought Stitcher in 2016 for $4.5 million and then combined it with Midroll Media, the podcast-advertising company it had acquired the year before for $50 million.

--Dave Sebastian contributed to this article.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

July 14, 2020 02:47 ET (06:47 GMT)

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