A Blog by Jonathan Low

 

Jun 10, 2019

The Reason the Sports Illustrated Brand Sold For $110 Million

Dead celebrities and live events. JL

Zack Greenburg reports in Forbes:

“SI’s trusted name and fiercely devoted following set the stage for the brand to become a leader in lifestyle and entertainment.” Meredith will pay a licensing fee to operate Sports Illustrated and SI.com for two years as part of the deal; ABG plans to focus on expanding the brand into areas including live events, gambling, eSports and video. His deceased stars are now regulars on our annual Halloween-spooky list of highest-paid dead celebrities.
Jamie Salter has a knack for sports world icons—his company, Authentic Brands Group, handles names from Muhammad Ali to Shaquille O'Neal. He added another to his brand portfolio: ABG announced the purchase of the intellectual property of Sports Illustrated from Meredith Corporation for $110 million.
“As one of the most iconic brands in sports media, SI is a cultural centerpiece with massive opportunities for growth across its burgeoning digital, TV and social platforms and industry-leading print magazine,” Salter, whom Forbes profiled last fall, said in a statement. “SI’s trusted name and fiercely devoted following set the stage for the brand to become a leader in lifestyle and entertainment.”
Meredith will pay a licensing fee to operate Sports Illustrated and SI.com for at least two years as part of the deal; ABG plans to focus on expanding the brand into areas including live events, gambling, eSports and video. Meredith has now raked in approximately $450 million from the sale of Time, Fortune and Sports Illustrated in its fiscal 2019.
“In addition to continuing to produce independent, award-winning journalism and storytelling—what Jamie Salter has described as the heart of SI—we are now perfectly positioned, with the support and resources of ABG, to thrive in many other spaces,” added Chris Stone, Sports Illustrated’s editor-in-chief.
For Salter, 56, the sporting world has long been a foundation. He started out in the 1980s selling windsurfing equipment before getting into the snowboard business, eventually settling into the licensing world. Salter launched ABG in 2010 with $250 million raised mostly from private equity firm Leonard Green & Partners as well as billionaires including George Soros and the Walton family.Salter made a name for himself as a someone with a penchant for jump-starting brands—from clothing labels like Juicy Couture and Hickey Freeman to stars like Marilyn Monroe and Muhammad Ali. He acquired the latter brand in 2015 as part of a $150 million deal that gave Salter the bulk of the Elvis Presley business (a piece of Graceland included). His deceased stars are now regulars on our annual Halloween-spooky list of highest-paid dead celebrities.
More recently, Salter has been cutting deals with living stars like Shaquille O'Neal, who in late 2015 became equal partners with him on the Shaq brand in exchange for a package that included a chunk of equity second only to Salter’s in size. Salter said last fall that both ABG and Shaq’s business have since grown by a factor of three as Shaq’s face continues to pop up in commercials for everything from The General car insurance to IcyHot pain relief.
Volume isn’t always Salter’s priority, though, and a look at his plan for another iconic name could offer clues to his strategy for Sports Illustrated. When he purchased 80% of the Marilyn Monroe estate in 2012 for a sum reportedly in the $20 million-to-$30 million range, he slashed its licensing deals from 300 to 80—focusing on securing high-end pacts with the likes of Chanel before dialing the number back up to 100 or so.
“You can sell X amount of Marilyn Monroe fragrance at a mass-market retailer, or you can do a deal with Chanel No. 5,” Salter said. “A No. 5 deal doesn’t pay as well, but I think that’s important for the brand because it gives a halo effect. And the truth of the matter is, she wore Chanel No. 5.”

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