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SBD/January 14, 2011/Media
Sporting News, AOL Sports Reach Content-Providing Arrangement
Published January 14, 2011
Sporting News is making an aggressive push to become a top-10 sports website with a broad content-providing arrangement with AOL Sports. Execs were scheduled to inform staffs at both organizations of the agreement on Thursday afternoon. The deal will create Sporting News on AOL within the next 60 days and give the venerable sports brand instant digital relevance. “We’ve made a lot of headway as far as adding video and developing a social media strategy," said Sporting News President & Publisher Jeff Price. "Adding scale was the last thing advertisers were asking for, and this deal allows us to deliver that." "The vision is one of providing real-time breaking sports news with a dynamic social media strategy and high-quality columnists and overall great journalism," said AOL Media President David Eun. Terms of the deal were not available at presstime. Sports content for AOL has been under its internally developed FanHouse brand for the past two years. Starting in March, Sporting News will provide and develop a majority of the content for the site from its current staff based in Charlotte. Sporting News will license the FanHouse brand from AOL and use it as a home for the site’s “voice,” or its columnists. Sporting News is expected to add a handful of top columnists from AOL, but sources said a number of AOL Sports editorial staffers have already been seeking jobs at other sports sites. It was unclear if any AOL Sports management will join Sporting News. Sporting News is owned and operated by SportsBusiness Journal/Daily parent company American City Business Journals (Terry Lefton, THE DAILY).
MOVING PARTS: Price said that Sporting News is "looking at broadening its national profile by retaining some of FanHouse’s columnists," but he did not indicate "how many reporters would be kept." Price: "We’re focusing on those national voices that created a differentiation." AOL Chair & CEO Tim Armstrong estimated that "two dozen of around 40 FanHouse employees would probably be laid off." In N.Y., Richard Sandomir notes AOL will "continue to produce local sports coverage, which fits into Armstrong’s strategic shift from e-mail to content." FanHouse has "made a far bigger impact on the Web" than Sporting News. Data from comScore shows FanHouse had 9.7 million unique users last month; Price said that comScore measured Sporting News’s traffic at "just under three million unique visitors, meaning it had doubled since its relaunch in August." Meanwhile, Armstrong "rejected the notion that AOL’s sports strategy had failed." He said, "This is a way for us to do it in a more profitable way and to do more coverage in the future. You can see this as a combination of two brands that are keeping their focus" (N.Y. TIMES, 1/14). Price said, "This is the last piece of the puzzle for us. Advertisers have told us that they love what we've done with our site over the past year in terms of video and social media, but they wanted reach" (ADWEEK.com, 1/13).
CHANGE OF PLANS: BUSINESS INSIDER's Henry Blodget noted AOL is "handing over one of its most successful premium content sites, Fanhouse, to a third party, and releasing many of its employees in the process." This move comes "shortly after AOL hired many expensive columnists to work for Fanhouse." Sporting News "will presumably be paying AOL a lot to license Fanhouse and get traffic from AOL." At the same time, AOL will "save a bunch of money by not paying expensive content creators," so this arrangement will "obviously improve AOL's bottom line, at least in the short-term." Blodget added, "In simple terms, AOL appears to be reverting to the 'portal' strategy that originally made it and Yahoo and other portals massive sites back in the days before Google, blogs, and social media" (BUSINESSINSIDER.com, 1/13). PAID CONTENT's David Kaplan wrote AOL's decision to "turn to outside sources of content, after spending years of hiring hundreds of writers and editors in-house, reflects a need to get the costs of producing so much content with the reality of what advertising can support." In past years, this "was not such a big deal, as AOL relied heavily on the traffic and revenues coming off its original internet access business." But more recently, "those traffic numbers and dollars have dwindled" (PAIDCONTENT.org, 1/13).