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Market Scoop

The Athletic tried to save Sports Illustrated

Moving the Market: Alex Mather and Adam Hansmann, the co-founders of the burgeoning sports news site The Athletic, tried to acquire the licensing rights to the Sports Illustrated media business after it became evident that Maven intended to turn the storied magazine into a content farm, sources familiar with the Athletic's offer tell me.

• The big picture: The Athletic's offer, which was at a premium on Maven's deal, would have given Sports Illustrated the opportunity to sustain and even grow its journalistic operation. Instead, Maven has cut roughly half of the editorial staff and plans to hire freelancers who will be paid based on their ability to drive traffic.

The timeline: In May 2019, the media conglomerate Meredith announced that it was selling Sports Illustrated to Authentic Brands, Jamie Salter's media licensing group, for $110 million. As part of the deal, Authentic would license the media arm — the magazine and website — back to Meredith.

• In June, Maven, a Seattle-based media company run by James Heckman, announced that it had paid Authentic $45 million upfront to license the media rights instead. Maven also announced that Ross Levinsohn, a controversial media executive, would become CEO of Sports Illustrated Media.

• In October, Sports Illustrated management informed staff that Maven was laying off roughly half of the editorial staff, sparking a fierce backlash from employees who feared that Maven's business strategy would destroy the quality of the 65-year-old sports publication.

Enter The Athletic, a subscription-based site staffed with local sports reporters who had been lured away from their dying regional papers. By then, the Athletic had more than 500,000 subscribers, was providing national and local coverage for nearly 50 cities and was valued at over $100 million.

• In early October, around the same time the Maven layoffs were announced, Mather and Hansmann got in touch with the bankers who were handling the agreement and offered to pay $50 million for the licensing rights — an 11% premium on the Maven deal, the sources said.

• Mather and Hansmann's plan was to upsell Sports Illustrated print subscribers to the digital Athletic product, allowing them to continue supporting the journalists it would have acquired in the deal.

• That is a deal that Sports Illustrated staff would likely have preferred. The day of the layoffs, NPR obtained a petition signed by roughly three-quarters of the journalists there asking Authentic to abandon the Maven deal.

Alas, the Athletic offer was flatly declined. It came in too late, for one thing — Maven took full control of Sports Illustrated the same day the layoffs were announced — but even then it's not clear that Authentic was interested.

• What's next: A great deal of pessimism over the future of Sports Illustrated, none of which was alleviated after Heckman and Levinsohn's appearance earlier this week at the Code Media Conference, which you can watch here.

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Derek Jeter sells to Minute

Talk of the locker room: "The Players’ Tribune, the media company founded by Derek Jeter dedicated to serving up first-person content from athletes, has been acquired by Minute Media — the latest roll-up play in a wave of consolidation in digital media," Variety's Todd Spangler reports.

• The big picture: "The Players’ Tribune-Minute Media pact comes after an uptick in similar combinations. In the last two months, deals in the sector have included Vice buying Refinery29; Vox Media buying New York Media; and Group Nine Media buying PopSugar."

What's next: Read Jeter's letter here.

🏈 Weekend Watch 🏈

Speaking of sports, your Sunday NFL calendar is stacked: Seahawks vs. Eagles (1 p.m. ET on Fox); Cowboys vs. Patriots (4:25 p.m. ET on Fox); and Packers vs. 49ers (8:20 p.m. ET on NBC).

🏀 Tonight: Rockets vs. Clippers (10:30 p.m. ET on ESPN)

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Obama talks misinformation

Big in the Bay, big in the Beltway: Barack Obama told a group of Silicon Valley’s wealthiest Democratic donors that online misinformation should be fought with more truth, not with Chinese-style censorship of political speech, Recode's Teddy Schleifer reports.

• The big picture: Obama's remarks, made at a fundraiser in Los Altos Hills, are a departure from the usual "blame Facebook" rhetoric. In fact, they may very well be in line with Mark Zuckerberg's own feelings on how best to deal with misinformation.

Top lines:

• "I believe in free speech. We can’t resort to Chinese-style monitoring of the correctness of every position on every blast sent out via social media."

• "We need to inoculate the body politics by getting our own accurate information out. We have to combat falsehood with truth."

Bonus: Obama told donors to “chill” in their divisions over the Democratic field and focus on "rallying behind" the eventual nominee, even if it's not their "perfect candidate."

Market Links

• Mark Zuckerberg weighs microtargeting changes (WSJ)

• Susan Wojcicki addresses demonetization woes (Verge)

• Jack Dorsey rolls out a new 'hide replies' feature (TC)

• Ken LaCorte peddles the inflammatory to the public (NYT)

• Shep Smith gives $500,000 to a free press group (NYT)

🦃 What's next: The weekend. T-minus six days til Thanksgiving.

See you tomorrow.