A wave of M&A activity has swept the media industry, with larger players snapping up a range of assets (MGM–Amazon, WarnerMedia–Discovery, DIRECTV–TPG, Meredith–IAC, S&S–Bertelsmann, and so on). In 2022, even more media assets are on the auction block—Tegna, likely Lionsgate, and many more.The consolidation makes sense. Large players have carved out segments and have penetrated their core audiences; to continue to grow, these outlets need to find new audiences by pushing into new content areas or purchasing new capabilities. Meanwhile, acquisition targets have appealing content, assets, and loyal audiences, but in many cases lack the financial effectiveness of the largest conglomerate players.In this new paradigm, where many media companies have relatively stable, discrete fiefdoms carved out, new avenues to growth are paramount for even the largest media companies. While there are other growth pathways to consider, M&A is a particularly salient topic in today’s environment.M&A can therefore unlock new value in the media ecosystem—the acquirer gains the benefit of audience growth, and the target has a path toward profitability as part of a larger entity. For this strategy to be successful, however, buyers must be thoughtful about what audiences they seek to tap into based on their core competencies. The New York Times’ (NYT) recent acquisition of The Athletic is an example of a winning M&A strategy and offers translatable insights, including:Diversification of content to flatten fluctuations in core coverageExpansion into new socioeconomic demographic segments to boost first-party data insightsMixing marketing and tech stack expertise and new audience access at the local level, fueling new sources of monetizationThis article explores each of these opportunities through the lens of the NYT–Athletic deal.Additional commentary from Michael Felice can be found in this recent MediaPost article.Diversification of content or core offering to flatten fluctuationsNational media companies are increasingly reliant on political cycles (for example, the “Trump bump”) and are challenged to maintain their subscribers during non-election years. Expanding coverage, particularly to high-engagement verticals, will enable the NYT and others to a) attract new consumers and b) maintain subscribers during non-election years.Expansion into new socioeconomic demographic segments to boost first-party data insights and adjacent monetizationLimited opportunities to expand the user base exist at the national level—the NYT and the Wall Street Journal each appeal to a particular audience and are unlikely to convert a reader of one to the other. The Athletic and other niche vertical brands give large national publishers access to new audience segments and offer up loyal consumers with high engagement. Sports are particularly appealing because fans are a captive audience with loyalty to a local team, whereas other lifestyle verticals such as cooking must continuously offer evolving content to prevent users from migrating to competitors’ products.Audience expansion unlocks new first-party data monetization potential, particularly for sports fans or other high-engagement consumers. Publishers can monetize this new first-party data with advertisers and identify ways to grow penetration (for example, bundling).Mixing marketing expertise and new audience access at the local level, fueling new sources of monetizationEvolving collegiate athletics regulation has opened a new avenue for media outlets to monetize and compete. Athletes are now content creators, offering huge potential in an untapped market. With its purchase of The Athletic, the NYT can take advantage of this rich new ecosystem and control sources of monetization, linking their expertise selling to advertisers with the rich content monetization of The Athletic.ConclusionThe Athletic is a smart buy for the NYT and offers valuable lessons for other publishers and media companies on how to identify complementary assets to expand audience beyond the core. The deal is a calculated buy that matches the NYT’s advertising capabilities, economies of scale, and subscriber-first orientation with The Athletic’s subscriber business model.Media M&A will continue to accelerate; however, it is paramount that leaders make intelligent decisions about what to buy and fully understand the rationale for how acquisitions will fit into their portfolios.