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Volume 26 No. 45
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Authentic Taking Over Revenue Development For SI, Unlike Meredith

Sports Illustrated Editor-in-Chief Chris Stone said that Authentic Brands will take over developing "new revenue streams" for SI "without any input from the publisher's editorial or sales teams" after buying the magazine from Meredith Corp. for $110M, according to Max Willens of DIGIDAY. Such deals had previously been "often done with input from SI's editors." Though publishers "typically take great pains to keep editors involved in anything related to a publisher's brand, this arrangement suits Stone just fine." He said, "We didn't have the infrastructure or the resources to really create a great licensing strategy." Stone also said that SI's other revenue streams, such as e-commerce and events, also "fell on his department's shoulders during SI's stay with Meredith." Stone said that during those years, SI "never met with Meredith's brand licensing operation." Over the years, SI has "tried numerous times to diversify into brand licensing revenue, licensing its brand for products ranging from children's golf clubs to, more recently, a line of women's bathing suits tied to SI's famous swimsuit issue." However, a source said that those revenues were "small, relative to SI's advertising business." The source added that across SI's lifetime, the "branded merchandise program might amount to revenues in the high seven figures" (DIGIDAY.com, 5/29).

TRIAL PERIOD: The AP's Tali Arbel wrote it is "not clear what will happen after two years" with SI, with Meredith continuing to handle responsibilities such as publishing the print magazine and managing the website. It is possible that Meredith and Authentic could "extend their licensing deal, terms for which weren't disclosed." Meredith has "long published Martha Stewart Living magazine under a licensing deal." Meredith VP/Corporate Communications Jill Davison said, "We believe we will have similar, great success developing the vitality and profitability of Sports Illustrated." Davison added that Meredith and Authentic will "evaluate the partnership after two years" (AP, 5/28).