Less than a month after buying the licensing rights to Sports Illustrated, marketing company Authentic Brands Group has leased the media operations of the iconic magazine to a Seattle-based start-up company, Maven.
According to filings with the SEC, Maven will pay Authentic Brands $45 million against future royalties and the two companies will enter into a profit-sharing agreement. The deal is for 10 years with the potential to be renewed.
Authentic Brands paid Meredith Corporation $110 million for Sports Illustrated’s intellectual property in May, allowing it the ability to monetize the SI brand. Potential revenue streams include Sports Illustrated-branded camps and merchandise, as well as archival photographs and covers. But Authentic Brands, which owns licensing rights to companies like Juicy Couture and celebrities like Muhammad Ali, has no experience running a media company. So as part of that agreement, Meredith was to pay a fee to Authentic Brands and continue to oversee the editorial operations.
Monday’s announcement by Meredith made that somewhat odd arrangement short-lived, though discussions continue over whether Meredith will still be involved in the magazine’s print edition. “As a result of ABG’s decision to license the Sports Illustrated media assets to a third party…Meredith’s goal of a completed transaction is achieved,” Meredith said in a statement.
Meredith, based in Des Moines, bought Time Inc. in 2017 for $1.8 billion and immediately put legacy titles Time magazine, Fortune and Sports Illustrated up for sale because they did not fit with the company’s lifestyle-focused publications, such as People magazine. Time and Fortune were sold last year, while Sports Illustrated did not fetch the same interest and its sale dragged into 2019.
For Sports Illustrated, there is opportunity in the deal with Maven in that its editorial operations will not be overseen by a company that had spent two years trying to sell it. Maven, a start-up platform for online magazines, carries its own risks, though, as its strategic plans remain opaque and it has not published a title like SI in its brief existence.
Maven also announced the new CEO overseeing the newly formed Sports Illustrated Media will be Ross Levinsohn, whose recent stint as CEO and publisher of the Los Angeles Times was marked by turmoil.
Levinsohn was also the subject of an internal investigation over past behavior in 2018. That review came on the heels of a report from NPR that found Levinsohn, in previous positions at the search engine Alta Vista and News Corp., had twice been accused of sexual harassment in lawsuits that suggested he had engaged in a variety of inappropriate behaviors. Both cases were settled.
Levinsohn did not return to the Times after the NPR report, although he received a new role within Tronc, which was then the parent company of the paper. An internal review by Tronc cleared Levinsohn of any wrongdoing.
“Based on NPR’s reporting about Levinsohn’s behavior and the culture he apparently fostered, I have serious questions and concerns about his hire and hope ABG shares its vetting process with us,” said Jason Schwartz, a senior editor at Sports Illustrated.
“ABG conducted due diligence prior to partnering with Maven as it does with each of its potential partners,” Authentic Brands wrote in a statement. “We have great confidence in Maven as our new licensee and in Ross Levinsohn as the head of its subsidiary Sports Illustrated Media."
Maven was founded in 2016 by James Heckman, who co-founded Rivals.com, a constellation of college recruiting websites that was acquired by Yahoo. Levinsohn, who has also had stints as an executive at Yahoo and Rivals.com, was an initial board member. Earlier this month, Maven acquired The Street, Jim Cramer’s financial news company, for $16.5 million.
Correction: An earlier version of this story incorrectly reported the month when Authentic Brands bought Sports Illustrated’s intellectual property.