Daniel Ek, chief executive officer and co-founder of Spotify AB.
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Spotify is expanding its podcast catalog and media footprint with a new acquisition of the sports and entertainment news company The Ringer, the company announced Wednesday. Spotify did not disclose the terms of the deal and said it expects the deal to close in the first quarter of 2020.
The deal follows three podcast acquisitions Spotify made in the past year. Last February, Spotify announced its plans to acquire the privately held podcast producers Gimlet Media and Anchor. In March, Spotify announced its acquisition plans for podcast company Parcast. While terms of the deal were not disclosed, Spotify disclosed in a later earnings report that it acquired Gimlet and Anchor for the equivalent of about $340 million and Parcast for around the equivalent of $55 million.
The Ringer, founded by sports writer Bill Simmons in 2016, has more than 30 podcasts in its network, including “The Bill Simmons Podcast,” “The Rewatchables” and “The Ryen Russilio Podcast.” It also produces non-scripted films, books and online content.
Spotify CEO Daniel Ek told analysts on a call following the company’s fourth quarter 2019 earnings report Wednesday, “what we really did with the Ringer, I think, is we bought the next ESPN, and we think that’s going to be a tremendously valuable property as we look at the development of sports over the next decade and the billions of people that will start listening to audio, so we’re just very excited about it and yeah, we will invest in that trend.”
Spotify said in a press release its hopes The Ringer deal will help it become “the world’s leading audio platform.” In an interview with CNBC’s Jim Cramer and David Faber following Spotify’s announcement of the Gimlet and Anchor deals last year, Ek compared the ramped up investment in podcast companies to Netflix’s investment in original content, though he said it won’t be at the same scale.
“It’s really about expanding our mission from just being about music to being about all of audio and being the world’s leading audio platform,” Ek said at the time on “Squawk On the Street.”
Spotify reported a fourth quarter loss per share of 1.14 euros compared to a loss of 0.22 euros analysts were expecting, according to Refinitiv. The company reported quarterly revenue of 1.86 billion euros compared to 1.89 billion euros, according to Refinitiv. The stock was down nearly 4% in premarket trading, dragging its market value down about $1 billion, bringing it to about $27.4 billion.
-CNBC’s Julia Boorstin contributed to this report.