“We bought the brand Sports Illustrated; we didn’t buy the company,” Maven Media founder and CEO James Heckman told the Code Media audience in Los Angeles about the company’s highly controversial purchase and restructuring of the venerated sports publication earlier this year.
He also didn’t buy Sports Illustrated’s business model, which consisted of paying a large staff of traditional journalists with money made from selling ads. After buying Sports Illustrated, Maven promptly laid off nearly 40 percent of its editorial staff.
Sports Illustrated has a “great brand, great reporters, unbelievable tradition — but they were in the wrong business model,” said Heckman, who was joined onstage by Sports Illustrated’s new CEO Ross Levinsohn. “They’ve got a 1986 business model. We’re bringing in specialists — team, fantasy, gambling, backpacking. That’s the model of the future,” Heckman said.
Sports Illustrated’s new business model includes a pared-down editorial staff as well as an army of “content creators” that Levinsohn said operate like franchises. Those content creators make money through a revenue share in which Sports Illustrated pays them a portion of ad revenue, based on the traffic they attract, rather than a salary.
Heckman said this could be a lucrative business model, referencing a North Carolina basketball writer who, he said, makes $900,000 a year employing this model at CBS (which bought Heckman’s previous sports media company, Scout).
Critics have called the system a content mill. As Deadspin put it, Maven “wants to build out a network of SI-branded Maven ‘team communities’ that will drive traffic through a combination of cynical SEO ploys, news aggregation, and low-paid and unpaid labor.”
By the end of next year, Levinsohn said the company would have more than 200 paid journalists and “hundreds if not thousands of content creators.”
Whether Sports Illustrated’s new business model will actually work — for the company or its bosses — remains to be seen.