Politico, a media company based in Arlington, Va., that redefined American politics and policy coverage for the digital age, has been sold to German conglomerate Axel Springer, in the latest example of corporate consolidation in a rapidly changing business climate for journalism.
As part of the deal, the German company will take full control of the Politico Europe partnership launched in 2014, as well as the technology news site Protocol, which began last year. Axel Springer’s previous inroads into the U.S. media market include its acquisition of Business Insider in 2015, along with a majority stake in newsletter publisher Morning Brew.
The deal marks the end of what Politico owner Robert L. Allbritton called “the ride of a lifetime,” although he will remain publisher of Politico and Protocol. Politico employees were told in a memo on Thursday morning that there will be “no changes of any kind for the indefinite future … on most of the specific day-to-day circumstances that affect employees at any level.”
In the announcement, Allbritton said that he realized that his company could better prosper if taken over by “a larger company with a significant global footprint and ambitions.”
Axel Springer is paying about $1 billion to acquire Politico, according to a person with knowledge of the deal who was not authorized to comment publicly. The conglomerate’s strategy in the United States has mostly focused on properties like Politico that have succeeded in making money through subscriptions and sponsorships more so than the advertising business model many other media properties rely on.
Politico’s success often attracted new entrants into the market it had proved out, as well as larger publications looking to scoop up some of its most successful journalists.
In 2016, VandeHei, Allen and three senior executives left the company and, in January 2017, started Axios, a rival publication that has targeted a similar pool of political-junkie readers and corporate advertisers. That space grew even more crowded when three Politico journalists, Jake Sherman, Anna Palmer and John Bresnahan, left to start a “membership-based news community” called Punchbowl News in January. The site focuses on Washington dealmakers and political power players.
Sherman and Palmer had co-written Politico’s Playbook newsletter since 2016, when they inherited it from Allen, who had made it famous with a relentless focus on insider-y political details, coupled with boldface birthday-party sightings around town.
Politico has also become known for a stance of editorial impartiality and neutrality, which has occasionally gotten the company in hot water. Earlier this year, many staff members bristled at a decision to hand over the company’s Playbook franchise to conservative superstar Ben Shapiro as a guest author, meant as a way to offer diverse perspectives. In response to the backlash, Politico Editor Matthew Kaminski told staff members that the publication seeks to set itself apart by rising “above partisanship and ideological warfare — even as many seek to drag us into it.”
Its reputation for neutrality was a selling point for Axel Springer, chief executive Mathias Döpfner said in the announcement.
“Objective quality journalism is more important than ever, and we mutually believe in the necessity of editorial independence and nonpartisan reporting,” he said. “This is crucial for our future success and accelerated growth.”
The lofty sale price for the acquisition comes at a time when many digital media publishers have combined in an effort to stave off a broader decline in advertising revenue that has caused some companies to shut down.
In May, the Wall Street Journal reported that Axel Springer has held talks to acquire a stake in Axios, but no such deal has been consummated.