It’s been quite the year for Sports Illustrated operator TheMaven, which made major staffing cuts in March (following previous major staffing cuts last October), announced further salary reductions for employees in June, laid off more team site publishers in August (and tried to tell at least one of them to take down tweets about being laid off), and wound up in several controversies, from suggestions to team site publishers to create burner accounts to sudden background checks after revelations on one team site publisher’s past to a lawsuit from former owner Meredith over unpaid transition fees (later settled) to the sudden elimination of publisher guarantees in October. And now, there’s some pressure from investors for major changes in who’s overseeing the company. We’ve already seen some changes, with CEO Jim Heckman stepping down in August and Ross Levinsohn taking his place, but as Alex Weprin of The Hollywood Reporter relayed Friday, this week saw a letter to the Maven board from two large investors calling for the entire current board to resign:
New trouble for Sports Illustrated owner TheMaven. Two of its largest investors, B. Riley and 180 Degree Capital wrote a letter to the board urging “the company to pursue a new direction” and for the current board to resign.
— Alex Weprin (@alexweprin) November 27, 2020
November 24, 2020
225 Liberty Street, 27th Floor
New York, NY 10281
Attention: Board of Directors
Ladies and Gentlemen,
As has been discussed with a number of you, the company and many of its stockholders, including the undersigned, believe that it is time for the company to pursue a new direction.
While we appreciate the time and dedication of the Board of Directors over the years, we believe that new direction needs to start from the top, with a new Board that better reflects the company’s current strategy and stockholder base.
Accordingly, the undersigned stockholders respectfully request that each of John Fichthorn, Rinku Sen, Peter Mills, David Bailey and Josh Jacobs tender their resignations from the Board effective immediately. We believe that it is in the best interests of the company and all of its constituencies, including the stockholders, that this transition be handled amicably. Having said that, we believe that like-minded stockholders representing a majority of the voting power of the outstanding shares of the company are prepared to remove the named directors if necessary and as permitted under Delaware law and the company’s organizational documents. We are prepared to begin the process of a consent solicitation as soon as Wednesday, November 25, 2020, if needed, but are hopeful it is not.
Again, our hope and desire is to have a mutual and friendly parting of the ways. We look forward to a prompt response.
/s/ Bryant R. Riley
Chairman and CEO B. Riley Financial Inc.
/s/ Kevin M. Rendino
Chairman and CEO of 180 Degree Capital
There have been numerous discussions of Maven’s direction over the years, including on the financial side. Last October, some of their 2018 SEC filings came to light in a Fortune piece, which included a report covering the period to June 30, 2018 that said they lost $8 million in the first six months of 2018 and took a $225,000 loan from Heckman. That report also saw executives express “substantial doubt about the Company’s ability to continue as a going concern within one year.” Things looked a little rosier by the end of last year, with the company raising $132 million between July 2018 and October 2019 and claiming more than $45 million in quarterly revenue for Q4 2019 (plus projecting $27 million in SI operational savings for 2020 following the October 2019 cuts), but a May filing suggested they only had resources to operate through April 2021.
It’s unclear exactly where Maven is financially right now. But the letter here from Riley and Rendino is quite the vote of no confidence in the current board. And if they actually have the majority votes to back that up, the current board may well be on the way out. If that does happen, we’ll see what that means for Maven in general and Sports Illustrated in particular. At the very least, it means there will probably be more big changes ahead.
[Alex Weprin on Twitter]