After years of under-investing in online and losing ground to the ESPN juggernaut, Time Inc. has thrown in the towel.
It’s transferring its sports-site web efforts to sister company Turner, which has aggressively pursued sports on the net with partnerships ranging from NASCAR to PGA Tour.
Time Inc. made a couple acquisitions over the past decade to beef up its sports properties, most notably Golf.com and FanNation. But it has been slow to address high school sports, a hot growth area, and it’s nowhere on local (city) coverage. Also, SI.com’s traffic is essentially flat for a year and far behind the big boys (see chart).
Finally, Time Inc. has recognised that it can’t compete and is transfering the property, according to the WSJ:
For the magazine unit, Time Inc. executives say Sports Illustrated’s website isn’t popular enough to compete for some big marketers, and they can’t afford the rights to the sports video that people increasingly expect online.
“We need scale,” said Mark Ford, president of the Time Inc. news and sports group. “The competition is getting bigger, so we needed to move now,” he said, citing among other rivals Comcast Corp.’s pending takeover of NBC Universal, which together would own a raft of TV-sports rights.
This deal also gives Time Inc. a sure profit stream at an uncertain time for print advertising. People familiar with the matter say as part of the deal, Turner agreed to guarantee $15 million to $20 million of annual net income to Time Inc. Mr. Ford said he also will look to collaborate within Time Warner for other brands he oversees, including Time and Fortune, as Mr. Bewkes pushes Time Inc. to further expand beyond print.
*Sports Illustrated sent us this statement:
“Sports Illustrated ‘s partnership with Turner Sports is throwing in the towel? This was a unique opportunity to align the strengths of best-in-class businesses to create new revenue opportunities for everyone. This alliance adds a wealth of digital video assets and resources to SI’s award-winning websites at a time when they are are generating record traffic and digital revenue. It will also cast a spotlight on what we do best: produce independent, original journalism.”
SI also provided us with Comscore audience data that show its readership climbing impressively over the past year — see the green line below. Compared to the flat measurement above from Compete.com, this is indeed impressive growth. Even more so if the comparison is with other magazine web sites. Unfortunately, the rest of the online sports universe does not measure themselves using that yardstick, and SI.com is still dwarfed by its online rivals.
In its heyday, SI was a powerhouse that media buyers would describe as “you can’t buy around” if you were trying to reach men, so dominant was its reach to a male sports-fan audience. It’s impossible to argue that online.
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