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Volume 21 No. 22
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Bids due for once venerable, now vulnerable, Sports Illustrated

Initial bids for Sports Illustrated, a longtime powerhouse of American sports media, were due last Friday, signaling once more the tectonic shifts in how sports fan consume information and the steady decline of SI.

 

Meredith Corp. formally acquired the 64-year-old SI in January as part of its far larger acquisition of Time Inc. But it quickly moved to resell the now-stepchild sports title, as that Time Inc. purchase was predicated on acquiring larger and more profitable magazine titles such as People. Meredith is also now reselling Time, Fortune and Money, and in March announced its intent to focus less on weekly magazines or those targeted primarily to men.

Reportedly, Meredith wants between $100 million and $150 million for SI and that may be a stretch. Gone are the days when the magazine arrived fat with advertising and it served as a dominant voice in the sports world. SI this year reduced its print frequency to biweekly, down from 38 issues in 2017, after publishing for nearly its entire existence as a weekly magazine.

Two of the publication’s key revenue drivers have been the annual Swimsuit Issue and the respected veteran football writer Peter King, creator of the popular Monday Morning Quarterback column that morphed into a larger football-centric website. Whether the Swimsuit Issue can now survive the current #MeToo era is an open question, and this year’s edition sought to frame itself around a theme of female empowerment, while SI in recent years has also built the issue into a larger initiative with experiential events.

King

King, meanwhile, will depart June 1 for a full-time role with NBC Sports after 29 years at SI.

“The departure of key staffers is never good in a sales process and always gives buyers a reason to pause and rethink a deal,” said Reed Phillips, managing partner at Oaklins DeSilva + Phillips, where he specializes in media investment banking.

Most magazines sell at a multiple of between five and six times cash flow, Phillips said. SI, he estimated, has cash flow of about $20 million, though he cautioned it could be less.

One banker who had a client considering an offer for SI said he had heard a pro sports team owner might be a possible buyer. That would be in keeping with an emerging trend in print media whereby high-net-worth individuals are increasingly acquiring venerated titles, the most prominent example of which may be Amazon Chairman Jeff Bezos’ 2013 purchase of The Washington Post.

The SI sale is being managed by Chris Russo, managing director of Houlihan Lokey. Russo declined to comment. But he played a key role earlier this year aiding Meredith in its sale of Time Inc. properties Golf magazine and Golf.com to former New York Islanders owner Howard Milstein and Emigrant Capital, giving him a familiarity with Meredith leadership and their intentions. Financial terms of the deal for Golf magazine and Golf.com were not disclosed, but some industry estimates hovered around $15 million.

A deal for SI is anticipated by the end of June.