Meredith Corp. has sold Sports Illustrated, the venerable US-based sports magazine, to New York-based marketing and brand development company Authentic Brands Group in an unusually structured $110m (€98m) deal.
Rather than a straight equity sale, Authentic Brands has acquired the intellectual property of the nearly 65-year-old title and will focus on licensing the SI brand. The Iowa-based Meredith, meanwhile, for at least the next two years will continue under license to print the magazine and operate the SI website and mobile app with editorial independence, and manage advertising sales for those media assets.
During this interim period, the two companies will participate in a profit-sharing agreement, sources said. But come 2021, the exact nature of the relationship between the two is unclear, and Meredith maintains some walkaway rights at that point. Authentic Brands company holds similar marketing rights for fashion brands Nautica, Aeropostale, and Juicy Couture, among many others, but this deal represents a first for the company in the media business. Authentic Brands intends to push the SI name aggressively into other areas, including potentially performance and health categories, esports, and sports wagering.
“SI’s trusted name and fiercely-devoted following set the stage for the brand to become a leader in lifestyle and entertainment,” said Jamie Salter, Authentic Brands founder, chairman, and chief executive.
The deal also includes rights to market and license the SI Swimsuit Edition, SI Kids, SI’s Sportsperson of the Year franchise, SI TV, and its photo archive.
SI finding a new owner was always a foregone conclusion, as Meredith early last year quickly moved to resell the title, as well as Time, Fortune and Money, after acquiring Time Inc. in a larger deal that was for $1.85bn plus debt. Meredith’s primary interest in that transaction was the larger, more profitable and more female-skewing titles such as People and Entertainment Weekly. An auction process to sell SI, once projected to last just several months, ultimately extended for more than year.
The sale process was led by financial services company Houlihan Lokey, which also led efforts for Meredith to sell Golf magazine and Golf.com last year to New York businessman Howard Milstein, and aided Time Inc. in its 2017 move to sell youth sports registration platform SI Play to NBC.
Though SI has remained profitable, the Authentic Brands deal extends a heavy period of change for the title. Once the dominant voice in US sports journalism, SI in recent years has seen a massive wave of new sports content competitors, and the rise of online journalism and social media cut heavily into its market share and brand power. SI, for more than six decades a weekly magazine, has steadily reduced its print frequency in the past four years and now publishes biweekly. Facing similar competitive pressures, Disney-owned ESPN last month announced it will shut down its unprofitable print magazine.
The Meredith-Authentic Brands agreement did not include Fansided, a network of sports and entertainment websites that had been managed under the SI umbrella. Houlihan Lokey is aiding Meredith on a resale process for that asset, too, with initial offers said to be hovering around $30m.