Sirius XM (SIRI) - Get Sirius XM Holdings, Inc. Report said it would pay $325 million for an E.W. Scripps (SSP) - Get E. W. Scripps Company Class A Report podcast production company, Stitcher, that includes, among other luminaries, Oprah Winfrey's network.
Stitcher's platform also features podcasts from Conan O'Brien, Rob Lowe and Marc Maron.
Sirius says that following the acquisition, the company will reach the largest addressable audience in the U.S. across all categories of digital audio - music, sports, talk and podcasts.
"The addition of Stitcher is an important next step as we continue to develop and strengthen our offering in the fast-growing podcasting market," said Sirius Chief Executive Jim Meyer in a statement.
"With Stitcher, we will expand our digital audio advertising presence and look to generate new ways for creators to find and connect with their audiences."
The purchase comes after Sirius's recent acquisition of podcast management and analytics platform Simplecast. Sirius said that podcasters would benefit from the transaction through "enhanced production, marketing and promotion capabilities."
Last month, analysts at Goldman Sachs raised their price target on Spotify to $280 a share from $205 based on its recent moves to purchase exclusive podcast content from popular podcasters like Joe Rogan and Warner Bros.
The investments include an exclusive deal with podcaster Joe Rogan, a multiyear partnership with AT&T's (T) - Get AT&T Inc. Report Warner Bros. and DC Entertainment to produce scripted podcasts exclusively on the platform, and an agreement with Kim Kardashian West for an exclusive criminal-justice podcast.
"While there are considerable risks to this strategy given the costs associated," the note said, "the underdeveloped nature of the podcast market, and challenges forecasting the financial impact to long term revenue and profit growth, ... the optionality these efforts create leave the risk/reward in owning Spotify in a favorable position, even when accounting for its recent outperformance."
At last check Sirius XM shares were off 1.1% at $5.64. Shares of E.W. Scripps, the Cincinnati television and newspaper operator, were up 8.8% at $9.69.
For Scripps the deal price produces "a return of more than double Scripps's investment in podcasting over the last five years," the company said in a statement.
The company built its podcast business in part by acquiring Midroll in 2015 for $55 million and the Stitcher app in 2016 for $4.5 million. Stitcher's 2019 revenue was $72.5 million, Scripps said.