Control of Sports Illustrated’s media operations has changed hands once again, just three weeks after the now former SI owner Meredith Corp sold the magazine’s name and licensing rights to Authentic Brands Group. Per a press release posted by Meredith and sent out to SI staffers, Sports Illustrated’s print and digital publishing operations will now be run by a company called Maven, a relatively unknown start-up run by two notorious media fuck boys.
According to an SEC filing published by Market Screener today, Maven has entered into a 10-year licensing agreement with ABG, which will give it control over SI’s print and digital operations. Maven prepaid $45 million to ABG against future royalties.
Sports Illustrated is now in the hands of James Heckman, the founder of Scout.com, a sports media company whose business model relies on unpaid and underpaid labor, and Ross Levinsohn, a former Tronc executive who has twice been sued for workplace sexual misconduct, as NPR reported last year. (After a months-long investigation into allegations against Levinsohn, Tronc eventually cleared him in February 2018, but he left the company not long afterward.) Heckman is Maven’s CEO, and Levinsohn was announced today as the new CEO of SI.
In March 2018, Heckman and Levinsohn were the subjects of a separate, deeply reported NPR investigation that touched on their mutually beneficial business relationships, their job histories, and their frat-boy approach to business. For example, both reportedly relied on partying with bikini-clad women on boats as a key business strategy. From NPR:
In June 2015, Heckman defended the parties as an indispensable tool — promising Levinsohn’s full attention on a yacht in France.
“I’m doing my ‘Obi Wan’ routine in Cannes,” Heckman wrote in an online chat with the then president of Scout. “I’ll have super-hot girls on the boat, music that is typically only played for guys like Richard Branson and Bob Pittman [at] private parties (super famous musicians among the elite), the Yacht is ridiculous. …
“So when you see expenses, plane tickets for girls you don’t know from Lithuania or something weird, just know that it’s not random but part of a well-orchestrated plan,” Heckman wrote.
He promised the spectacle would keep key players happy.
“[W]e’ll have some girls stuffed in one of the small rooms. Don’t judge it, and if people complain, tell them to shut the f*** up,” Heckman wrote. “This is how I raise money, build relationships, and have established that arrogant image that people hate.”
When Meredith Corp sold Sports Illustrated to ABG last month, it was with the agreement that Meredith Corp would continue to run SI’s media operations for up to two years to give ABG time to “learn how to be a media company.” Though that two-year timeframe was flexible and able to be accelerated, few people expected that it would be accelerated to only three weeks. Now that ABG has sold the media operations of SI off to Maven, Meredith Corp—the company that was supposed to nurture, shepherd, and financially back Sports Illustrated’s print and digital media operations through the sale transition period—is now effectively out of the picture. That leaves Maven, led by Heckman and Levinsohn, to run Sports Illustrated’s publishing. The New York Post reported today that Maven had previously been “backing retired NBA star Junior Bridgeman’s bid to buy Sports Illustrated, but lost out on its chance to take over the whole operation when Bridgeman himself could not produce his portion of the financing to close to the deal.”
Exactly when and how Maven entered the picture as a home for Sports Illustrated’s media operations is still not clear. (Sports Illustrated’s top editor, Chris Stone, declined to comment.) What is clear, though, is that Maven is an unproven company that doesn’t even have a real website, boasts “Blue Lives Matter” as one of its “live Maven channels,” whatever the hell that is, and is run by men who reportedly operate like they watch The Wolf of Wall Street before bed every night.
As the NPR report described, the Heckman and Levinsohn have a long history that includes buying each other’s companies for millions of dollars, hiring each other, and writing each other personal checks when those favors pay off:
- As the chief of Rupert Murdoch’s Fox Interactive in 2005, Levinsohn led the purchase of a Heckman startup called Scout Media for $60 million and hired him.
- In 2011, as a senior executive at Yahoo, Levinsohn encouraged the acquisition of a digital ad platform that he and Heckman had founded together called 5to1. Yahoo bought it for $28 million. Heckman later cut Levinsohn a check from his own private account, which Heckman said was in gratitude for the company’s success. The transaction, which has not been previously reported, was confirmed to NPR by both Heckman and Harder, Levinsohn’s lawyer.
- After Heckman bought back Scout Media from Fox, Levinsohn became the digital site’s executive chairman. It went bankrupt. Last fall, a small group of investors filed an ongoing lawsuit in federal court naming Levinsohn and Heckman along with other defendants. The Manhattan district attorney’s office has sought more information about the firm’s activities, an interest documented in emails reviewed by NPR.
- In the past 18 months, Heckman wooed Tronc to acquire a major stake in his latest startup with Levinsohn, called Maven, while Levinsohn was already on Tronc’s payroll as a consultant, according to filings submitted to the U.S. Securities and Exchange Commission.
For Meredith, extricating itself from SI is a good deal. The company gets to dump a publication it never even wanted (it bought Time Inc.’s assets for its lifestyle brands like People), and it frees itself from paying a licensing fee to ABG while keeping open the option to provide back-end services to SI “at an attractive return.” For Sports Illustrated, though, it’s a mixed bag. The stability that comes from being run by an established media company, even one that wasn’t fully interested, is gone, and replaced by a wild-card in Maven. Maybe Maven really will provide the fix for SI’s dreadful website and maybe it will prize quality journalism above thirsty brand moves. Or, perhaps, ABG leadership sees the Maven bros as useful for their purpose of maximizing the value of the Sports Illustrated name to sell shit. After all, ABG CEO Jamie Salter already envisioned a future for SI in which ABG was selling “Sports Illustrated medical clinics.” I’d be shocked if Levinsohn and Heckman weren’t already thinking about how to enact a new business strategy that involves throwing boat parties with SI swimsuit models.
Source: Read Full Article