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Sports Illustrated Needs a Business Model, Not Your Outrage

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(Bloomberg Opinion) -- The Sports Illustrated saga refuses to end. Last week, the commentariat erupted with fury after the venerable magazine laid off at least 25 percent of its editorial staff, including a number of respected writers, and announced plans to hire scores of part-time freelancers. On Sunday night, management issued an angry statement excoriating “inaccurate” news coverage but essentially confirming the reports: veterans out, part-timers in. This week, cue dewy-eyed reminiscences about the “bottomless wonder” of growing up when SI bestrode the sports world like a colossus.

But business isn’t charity. The magazine, once among the mightiest in the land, is tottering. Meredith Corp., which paid billions for Time Inc.’s magazine properties, dumped Sports Illustrated this past spring at the fire-sale price of $110 million because it couldn’t see a way to bring the brand to profit. The buyer, Authentic Brands Group, licensed publication rights to theMaven Network Inc., a digital platform, as a last, desperate throw. The latter’s plan to hire what a columnist for AdAge dismissed as “freelancers who won’t be provided with healthcare benefits” might prove to be SI’s only path to survival.

Don’t get me wrong. I’ve loved Sports Illustrated for as long as I can remember. I grew up with the magazine, back in the days when there was no other source for gorgeous glossy photographs of athletic events and in-depth analysis of games and trends. Back then, the Super Bowl wasn’t officially over until SI arrived in the mailbox a couple of days later to explain how the winner had won. I grieve to see what’s happening to a publication I once could scarcely live without. I ache for the fine writers who have been unceremoniously booted out of their jobs.

Alas, there’s no magical shield protecting Sports Illustrated from the tsunami that has engulfed the rest of the magazine world. And the flood is washing away profits — fast. In 2018, magazine print advertising fell an astonishing 18 percent year-over-year, from $10.9 billion to $8.97 billion, according to data compiled by eMarketer. Everyone faces the same headwinds. Cosmopolitan’s circulation is plummeting. Newsweek is a shell of its former self. The U.K. edition of Marie Claire is going out of print. Sports Illustrated itself has endured three previous rounds of layoffs over the past five years.

Let’s grant that theMaven handled the latest round with an ugly carelessness worthy of Logan Roy. But trying to cut costs doesn’t turn management into “soulless vultures.” Instead of shaking their fists at the new owners and the “contractors” on whom the magazine and its website will increasingly rely, critics should recognize the inevitability of these events in a world where print is shedding readers in droves. If the critics can think of a better way to return SI to profitability, now is the time to shout it from the rooftops.

Yes, plenty of new print magazines are being launched — AdWeek puts the number at 134 since the beginning of 2017 — but they’re heavily lifestyle-oriented, or designed to compete in niche categories. (Think Happy Paws.) On the other hand, this past spring, Brides magazine ended 85 years in print. Under new owner Dotdash (a subsidiary of IAC), the periodical will become all-digital.

Paperless: That’s where most of the big, heavy print magazines — or books, as they are often called in the trade — are surely headed.

Want a close look at SI’s likely future? Consider the Sporting News, which was founded in 1886 as a print publication. For decades it was the true fan’s source of detailed statistics and game recaps. When I was a kid, out-of-town contests received little coverage in the local paper beyond their final scores and, if we were lucky, the name of the player who had made the winning free throw. I scrutinized the Sporting News in order to understand how these far-flung games had actually unfolded.

But once the web made that information easy to find, the publication took a good hard look at itself. In 2012, the Sporting News decided to go all-digital. Its fluctuating web traffic tends to place it toward the bottom of the top 100 sports sites, according to Similarweb: blah, but not embarrassing.

However heady its past, Sports Illustrated is likely headed in the same direction. The magazine’s print version still has over 2 million subscribers, but this number continues to fall, and in 2018 the magazine went from weekly to biweekly. And online, Sports Illustrated is a minnow. As of this writing, si.com (as Sports Illustrated is known online) ranks just slightly ahead of the Sporting News — which has no print version to drive traffic to its site.

The shark is top-ranked espn.com, which easily outdistances everybody else. The vast spaces in between are filled in part by the sites of the major sports leagues and the sites of the broadcast television networks. This is competition SI is unlikely to overcome.

Yet even ESPN, for all its dominance of sports media, has been unable to keep its print arm going. Earlier this year, the company discontinued its glossy magazine — called simply ESPN the Magazine — after two decades. Why? Because “consumer habits are evolving rapidly.”

Exactly. Like Sports Illustrated, ESPN the Magazine at its best was a fantastic journalistic enterprise. But those evolving consumer habits make selling quality journalism tougher. And unlike ESPN, Sports Illustrated lacks a wildly popular website to which it can move the fantastic journalists who provided the print content.

I’m not celebrating a world in which veteran journalists are replaced by part-timers. And although I have nothing against the incoming brace of freelancers, who are reportedly being offered up to $30,000 a year plus a bonus based on readership and advertising, I am skeptical that they will produce content of anything like the quality to which SI’s readers have become accustomed. But the way content is consumed is changing fast, and the numbers that have long been running against print magazines have hit sports periodicals with particular force. Few publications have been able to make up in online advertising revenue what they’ve lost in page revenue. If you can’t sell advertising, it’s hard to pay your staff. The pinch is felt by every one of us who writes for a living.

To survive, Sports Illustrated needs to rethink its enterprise. Maybe there’s a better way than hiring a legion of part-timers. But that’s very much the way of the web ... and of the world. By an interesting coincidence, just about the time theMaven was laying off a quarter or more of SI’s staff last week, Uber Technologies Inc., whose business model is also under pressure, was launching a new app that will pair part-time workers with employers looking for temporary help.

You can shake your fist at change or you can adapt.

To contact the author of this story: Stephen L. Carter at scarter01@bloomberg.net

To contact the editor responsible for this story: Sarah Green Carmichael at sgreencarmic@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Stephen L. Carter is a Bloomberg Opinion columnist. He is a professor of law at Yale University and was a clerk to U.S. Supreme Court Justice Thurgood Marshall. His novels include “The Emperor of Ocean Park,” and his latest nonfiction book is “Invisible: The Forgotten Story of the Black Woman Lawyer Who Took Down America's Most Powerful Mobster.”

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