Satellite radio provider Sirius XM Holdings (NASDAQ:SIRI) is extending its reach into podcasts.
The company has announced that it is buying Stitcher, E.W. Scripps' (NASDAQ:SSP) podcast business, for $325 million U.S. Stitcher streams podcasts such as Freakonomics Radio, Conan O'Brien Needs a Friend, My Favorite Murder, SuperSoul Sunday from the Oprah Winfrey Network, LeVar Burton Reads and WTF With Marc Maron.
Stitcher also owns and operates a mobile app listening platform where consumers can stream a range of podcasts, including news, sports, talk and entertainment shows, on-demand and free of charge with ads (or for a subscription fee without advertisements). Stitcher competes with the podcast libraries of companies such as Apple (NASDAQ:AAPL) and Spotify (NYSE:SPOT).
SiriusXM, which bought online music service Pandora Media in a $3.5 billion U.S. deal in 2018, has been investing to bolster its podcast business. Last year, the company signed a multi-year deal with Walt Disney Co. (NYSE:DIS) that allows it to create exclusive weekly podcasts, including five new series on popular Marvel characters such as Wolverine, Hawkeye, Black Widow and Star-Lord.
Under terms of the deal, SiriusXM will pay $265 million in cash to Scripps, as well as up to $60 million in additional payments based on Stitcher achieving certain financial metrics in 2020 and 2021. Stitcher's 2019 revenue was $72.5 million. The deal is expected to close in the third quarter of 2020.
