He Pushed the New York Times to Buy Wordle. Now He Has to Make Sports Work.

The Wall Street Journal · 2023-07-09 06:00

By Alexandra Bruell | Photographs by Nate Palmer for The Wall Street Journal

New York Times executive David Perpich woke up one morning last year and read a story about Wordle, the addictive word-puzzle game. He fired off a Slack message around 6:30 a.m. to a colleague who oversees the company's games unit.

"We've gotta go buy this thing," Perpich wrote. The Times did precisely that a few weeks later.

Perpich, a fifth-generation member of the Ochs-Sulzberger family that has long controlled the Times, has been a force in its expansion beyond news into areas like games, cooking and product recommendations.

Now that strategy faces its biggest test: Will becoming a big player in sports-media, through the $550 million acquisition of the Athletic last year, pay off? Perpich has become the publisher of the Athletic, and its fortunes could have a major bearing on his legacy as a proponent of innovation within the Times.

In a recent interview, Perpich laid out how the Times, a company whose slogan was "All the News That's Fit to Print," started thinking about all the products people are willing to pay for. The company now sells an "All Access" bundle with a range of products it hopes will help lure in new subscribers and make it hard for them to walk away.

"I started to get really interested in this idea that the Times was a newspaper, and newspapers were more than about news. They were a bundle of information," he said. To map his idea, Perpich drew a daisy on a whiteboard, with news in the middle, and other products as the petals.

Sports was a missing petal. "Even though we have great sports coverage at the Times, it's really targeted more towards the general interest audience," he said. "Fandom is so huge -- how could we actually participate in that?" The Athletic offered the Times an audience of nearly one million subscribers addicted to coverage of their own local and favorite sports teams.

But the site isn't profitable. Facing challenges felt across the digital publishing landscape -- the difficulty of signing up and retaining customers, rocky ad markets -- as well as high editorial expenses, the Athletic has had adjusted operating losses totaling around $37 million over the past four quarters. Perpich said the goal is to turn a profit by 2025.

The Times in June eliminated around 20 roles at the Athletic as it focuses coverage on teams with broad appeal, rather than assigning beat reporters to every team regardless of interest, Perpich said. "In the end, we're still going to have over 100 reporters who are beat reporters covering teams," he said. "We're just not able to make it work everywhere."

Meanwhile, Perpich faces a possible organizing effort inside the roughly 400-person Athletic newsroom -- he says he won't oppose a union -- and the acquisition has introduced concerns from Times staffers about the future of the Times's approximately 40-person sports desk. Perpich declined to comment on the sports desk's future.

The Times's overall bundling approach is bringing in subscribers. The company added around one million digital subscribers last year. It had 9.7 million total subscribers, including print, as of the first quarter, with a goal of reaching 15 million by 2027. The company is drawing a lot of those people in with steep discounts off the bundle's list price of $25 per four weeks. Average revenue per digital customer was $9 in the first quarter, a decrease compared with a year earlier.

Eventually, the discounts will run their course, and the Times's pricing power will be tested. Charging for a bundle of content is an age-old media concept that proved lucrative for the cable-TV industry for decades, until consumers started rebelling against high prices. The Times is betting consumers will conclude that its bouquet of offerings is worth a premium.

"The key to smart product bundling, of course, is not to get greedy," said Jim Friedlich, Chief Executive of The Lenfest Institute for Journalism, which owns the Philadelphia Inquirer. "The consumer will tell us when 'premium content' becomes egregiously overpriced." Friedlich said only a handful of news organizations other than the Times, including The Wall Street Journal and Washington Post, have the "breadth of content and pricing power" to build a product bundle.

Perpich, a 46-year-old with a Harvard M.B.A., was at the forefront of almost every major strategic decision at the Times in the past decade-plus, people familiar with his tenure at the company said. Before his uncle, Arthur Sulzberger Jr., stepped down as publisher in 2017, Perpich was in contention to replace him, as were his cousins, deputy managing editor Sam Dolnick, and Sulzberger's son, A.G. Sulzberger, who ultimately got the job.

A Washington, D.C., native, Perpich started his career at startups such as Scratch DJ Academy, an outfit that holds DJ courses and books DJs for live events. He is a self-described sneakerhead, so devoted that he once cleaned his Adidas "shell toe" shoes with Windex and a toothbrush. When Perpich turned 30 he had a pair designed by the winner of the Funkmaster Flex Sneaker Battle.

Perpich thinks of himself as the guy behind the curtain. "I have a deep appreciation for the talents I don't have," he said.

After business school and a stint in consulting, Perpich joined the Times in 2010 as an executive director focused on the launch of the website's metered paywall, a move that shifted the company to a heavy focus on digital subscriptions. "I truly believe this is the model of the future," he wrote to his cousin, former Times Vice Chairman Michael Golden, prior to joining the Times.

He went on to oversee the development of a stand-alone Cooking app and the popular Games suite of products. "He's been using the word bundle longer than anyone in the institution, and, as you know, has done more than anyone to actually grow those things," A.G. Sulzberger said.

"The purchase of Wirecutter and the beginning of the cooking app was, to my mind, rebuilding for the modern age," said former executive editor Dean Baquet, who met with Perpich for years at the Times's 14th-floor cafeteria to swap notes on life in the business and editorial operations.

Colleagues say Perpich encouraged experimentation. "We need a high tolerance to try things," Chief Product Officer Alex Hardiman said. The Times recently ended an effort to launch a kids app after determining the effort would be costly due to the need for varied content to reach different age groups, and it would be wiser to invest in areas like sports and audio, according to people familiar with the matter.

Perpich is mindful of the potential risk for the news organization as it ventures into other businesses. "From a brand perspective, we have to be careful that we don't become known as a games company," he said. "We're not going to be the next Candy Crush."

The Athletic's newsroom has a culture sometimes alien to the Times and keeps a different set of standards. The Times, for example, has a policy that prohibits voting in industry events such as selections for all-star games, while the Athletic doesn't.

Some Times sports staffers are worried that their group will be folded into the Athletic, Times employees said. At a recent meeting to discuss a new role for a senior sports editor, executive editor Joe Kahn declined to commit to keeping the Sports desk the same size, according to attendees.

Despite the job cuts, the Athletic plans to increase head count as well as invest more in coverage areas with broad appeal, such as the National Football League and the English Premier League, according to Perpich and a recent company memo.

Write to Alexandra Bruell at alexandra.bruell@wsj.com

(END) Dow Jones Newswires

July 09, 2023 06:00 ET (10:00 GMT)