The long-running sale of Sports Illustrated has taken yet another twist. There are still a bunch of bidders in the mix, but a new one emerged Thursday; that would be Authentic Brands, owner of estates from Muhammad Ali to Marilyn Monroe to Elvis Presley (and manager of other estates like Michael Jackson’s) and owner of clothing companies like Juicy Couture and Aéropostale. Jeffrey Trachtenberg and Benjamin Mullin of The Wall Street Journal reported that Authentic Brands is a “leading contender” to buy SI for about $110 million, with Mullin going even further on Twitter and calling them “the most likely to prevail”:
— Ben Mullin (@BenMullin) April 25, 2019
There’s a long history here that’s worth looking back at. Back in April 2017 when current SI owner Meredith was first bidding for then-SI parent Time Inc. (Meredith), it was pretty obvious they planned to sell off titles like Time and SI, and that became even more clear after Meredith eventually bought Time Inc. in November 2017. March 2018 saw SI officially put on the block (alongside Time, Fortune and Money: Time and Fortune were eventually sold in September and November 2018 respectively for $190 million and $150 million each, while Money wasn’t sold and ended print publication earlier this month), with Meredith reportedly targeting $150 million as a price in April 2018 and plenty of optimism of “hoping to complete its sale of the magazine by December” last August.
But September saw reports of declining SI revenues and suggestions that the price Meredith was asking was too high. And while everyone from Cleveland Cavaliers’ owner Dan Gilbert and motivational speaker Tony Robbins to former NBA player Ulysses Lee “Junior” Bridgeman was linked to buying SI, none of those deals have actually come to pass yet. And a Vanity Fair piece this week by Joe Pompeo was headlined “‘They Need To Get Something Done’: As Time Parties With The Benioffs, Meredith Is Still Trying To Unload Sports Illustrated—And The Clock Is Ticking.” Here’s the key SI-related part there:
“Meredith told the street they were gonna have a deal done by June,” one person with knowledge of the sale process told me a couple weeks ago. “It’s the middle of April, and there are still multiple people in conversations.” According to another person close to the sale, there are “at least three” suitors presently in the mix, one of which is believed to be a group led by former basketball star Junior Bridgeman. (A Meredith spokesman said, “I can’t comment on any particular potential buyer other than to say we have several interested parties.”) According to my sources who are plugged into the deal-talk, Meredith wants between $120 million and $150 million for Sports Illustrated and the accompanying sports Web site FanSided, which Time Inc. bought in 2015.
Asked for an update on the E.T.A., the Meredith spokesman said, “We hope to have an agreement in place by the end of the fiscal year, but don’t have a specific timetable.” That said, the clock is ticking. “I think they’re at a place where if it doesn’t move soon for whatever set of reasons, it’ll actually start to diminish in value,” one of my sources with knowledge of the sale process said. “They need to get something done sooner rather than later.”
Now, the $110 million from Authentic seems low next to what Meredith wanted, but perhaps they aren’t getting better deals from anyone else. It’s also notable that the WSJ piece mentions that the Authentic bid appears to be just for SI, not FanSided; that could see Meredith selling FanSided separately. It’s not clear how much Time Inc. paid for FanSided back in 2015 or what it might be worth as a standalone business now, but they did gain some insights, technology and traffic from buying FanSided and other smaller brands. And maybe there’s some value for someone else in buying FanSided, and maybe that could get the overall price up towards what Meredith was looking for. (It’s also worth noting that many print magazine deals have also included some ongoing arrangements over everything from office space to technology to printing, so even a bid that’s lower in reported price might be better than it looks depending on those side details.)
If Authentic Brands is successful with this bid, that’s going to be interesting on a number of fronts. For one thing, they don’t appear to have much in the way of publishing properties in their portfolio, so managing something like Sports Illustrated would be a departure for them. And that could raise some questions about how such a brand-oriented company will handle the editorial side, and if there would be any interference there. (Or if there would wind up being major cuts to editorial operations if what they really want is the SI brand and the ability to put it on things.)
Of course, it’s also possible Authentic sees value here on another front (maybe using ad space in the magazine and on the digital properties to advertise their other brands), and that they could wind up being a good owner for SI. It’s also possible that they won’t win this bid at all, and that either SI will be sold to another group soon or that it will remain on the block for even more time. But Authentic’s entrance into this bidding is yet another notable twist in the SI saga, and we’ll see how it turns out.