Companies Backing The Venture
Authentic Brands Group: (ABG)
May 27, 2019 -- Authentic Brands Group (ABG), a global brand development, marketing and entertainment company, today announced that it has finalized the purchase of the intellectual property of Sports Illustrated from Meredith Corporation, the leading media and marketing company reaching 175 million American consumers each month via print, digital, mobile, video, social and broadcast television platforms. This transformative acquisition adds a new vertical to ABG's growing platform and portfolio, which currently generates over $9.3 billion in global retail sales annually. -source
August 11, 2019 -- BlackRock (BLK) Takes Stake in Owner of Sports Illustrated, becomes the largest shareholder of the company that owns brands including Sports Illustrated, Nine West and Aéropostale in the first deal for the investment company’s new private-equity fund.
BlackRock is taking a roughly $875 million stake in Authentic Brands Group LLC that values the closely held brand development, marketing and entertainment company at more than $4 billion including debt, according to people familiar with the matter. -source
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On Nov 28, 2023 Santul Nerkar and Kevin Draper at the New York Times reported that, “In 2019, the media conglomerate Meredith sold Sports Illustrated’s intellectual property to the Authentic Brands Group. It also sold a 10-year license to publish Sports Illustrated to TheMaven, which has since been rebranded as the Arena Group. According to financial filings, Arena pays Authentic Brands $15 million annually for the right to operate Sports Illustrated.
Authentic Brands’ business model mostly involves buying fashion brands that are down on their luck or in bankruptcy — Brooks Brothers, Aéropostale, Forever 21 — and then shedding legacy commitments, cutting costs and operating the brand while banking on its name recognition.
The Sports Illustrated brand has been attached to nutritional supplements, and the chief executive of Authentic Brands once envisioned Sports Illustrated-branded medical clinics.”
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Authentic Brands Group is named in the FOIA and was slated for a Sept 18, 2023 meeting in Clearwater, FL to review the proposed Kline Lot project slated for the heart of downtown Ann Arbor on public land previously identified for affordable housing.
While no attendees list was provided, the confirmation of the schedule was signed off on by both Dohoney and Jones when on Aug 23, 2023 at 8:33 AM Dohoney emailed Khimberli Jones:
“It looks like our direction is taking shape. Let Odis know that I won’t be here Sept 6th or 7th but that meeting can go on with our dept reps. They know a date is coming, and we will secure a space here in City Hall for folks to talk once you confirm the date.”
For the meeting, the FOIA states:
Sept 18 – Meeting with ABG
Location: Clearwater
Goal to share proof of concept at Michigan
LJC (Lamar Johnson Collaborative) to fold in Massing, Plans, Renderings to EVH (Experiential Ventures Hospitality) deck
The Arena Group: (TAG)
June 17, 2019 | NPR by Sasha Ingber -- The storied magazine Sports Illustrated and its website have a new publisher. The 65-year-old magazine's editorial content will be controlled by a digital outfit called Maven, in a deal announced Monday. Ross Levinsohn, the controversial former publisher of the Los Angeles Times, has been named CEO.
It comes just three weeks after Sports Illustrated was bought for $110 million by a brand and marketing firm called Authentic Brands Group. As part of that deal, its previous owner Meredith Corp. would have had editorial control for up to two years. Instead, Authentic Brands now has a deal with Maven.
A Seattle-based media company, Maven was founded by James Heckman, who previously worked at Fox and Yahoo. Heckman and Levinsohn, who was also an executive at Fox and Yahoo, have long been professionally intertwined. They plan to rename the organization Sports Illustrated Media and expand the brand internationally in partnership with Authentic Brands.
Though the organization didn't provide an editorial vision, the deal raises questions about the editorial future of Sports Illustrated. The business practices of Levinsohn and Heckman were the subject of an earlier NPR investigation.
As publisher of the Los Angeles Times and an investor in a digital outfit called True/Slant, Levinsohn embraced a strategy he termed "gravitas with scale" — a model that was based on unpaid contributors and meant job losses for the traditional newsroom journalists in The Tribune publishing chain.
Levinsohn was sued twice as an executive, and was accused of fostering a workplace environment that was conducive to sexual harassment, NPR has previously reported. His corporate employers settled both lawsuits against him and his co-defendants for undisclosed sums.
Maven paid $45 million against future royalties of Sports Illustrated, according to a Securities and Exchange Commission filing. Under the terms, Authentic Brands will pay Maven a share of revenues, and a 10-year licensing agreement that can be renewed for a total of 100 years.
Bridge Media & 5-Hour Energy:
November 6, 2023 -- The Arena Group Holdings, Inc., a technology platform and media company home to more than 265 brands, including Sports Illustrated, TheStreet, Parade Media, Men’s Journal, and HubPages, today announced that it has signed a definitive agreement under which the Company will combine with Bridge Media Networks, LLC.
5-Hour International Corporation Pte. Ltd. (“5-Hour”), will purchase $25 million of common stock of the combined company (“New Arena”), and The Hans Foundation, USA will purchase $25 million of preferred stock of New Arena.
Simplify and 5-Hour are expected to hold 65% of all outstanding shares of New Arena common stock. The existing assets of The Arena Group will be combined with the video programming, distribution, and production assets of Bridge Media Networks, including Bridge Media Networks’ two 24-hour networks, NEWSnet and Sports News Highlights, as well as the automotive and travel properties Driven and TravelHost.
In addition, The Arena Group will receive a five-year guaranteed advertising commitment of approximately $60 million aggregate value from a group of consumer brands also owned by Simplify, including 5-hour ENERGY®. -source
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December 7, 2023 -- Front Office Sports: ‘The Amount of Useless Stuff You Guys Do Is Staggering.’ Inside a Shakeup at Sports Illustrated’s Publisher by Michael McCarty and A.J.Perez
One week after Sports Illustrated suffered an embarrassing artificial intelligence scandal, the latest leader of the company that operates SI laid down the law for his new employees.
Manoj Bhargava, the 5-Hour Energy drink owner whose firm earlier this year purchased a controlling stake in The Arena Group, which operates Sports Illustrated, introduced himself in a meandering video call with Arena staff on Wednesday afternoon.
That call was preceded by a shakeup atop SI and The Arena Group: Out are Arena COO Andrew Kraft and president of media Rob Barrett. With the call, Bhargava asserted his control of the publication and other outlets under the Arena banner, sources told Front Office Sports.
“No one is important,” Bhargava told staffers, per one source on hand for the presentation. “I am not important. … The amount of useless stuff you guys do is staggering.”
The meeting lasted more than 90 minutes, and Bhargava joked at one point, “Did anyone bring any 5-Hour [Energy drink]?”
Other highlights from Bhargava’s comments during the town hall:
A rant about recycling being “useless.”
He told employees they should “stop doing dumb stuff.”
He declared “PowerPoints are illegal” because such presentations are a waste of time.
SI and TAG are still dealing with the fallout from a bombshell report last week by Futurism that alleged the venerable journalism outfit had used artificial intelligence to create product reviews and had fabricated bylines and headshots.
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Maggie Harrison on Futurism states, “But now that it's under the management of The Arena Group, parts of the magazine seem to have devolved into a Potemkin Village in which phony writers are cooked up out of thin air, outfitted with equally bogus biographies and expertise to win readers' trust, and used to pump out AI-generated buying guides that are monetized by affiliate links to products that provide a financial kickback when readers click them.”
Adding, “Basic scrutiny shows that the quality of the AI authors' posts is often poor, with bizarre-sounding language and glaring formatting discrepancies.”
Travel + Leisure = Wyndham Destinations
October 25, 2023 -- Travel + Leisure Co. reports third quarter 2023 results: (NYSE:TNL), the world’s leading membership and leisure travel company, today reported third quarter 2023 financial results for the three months ended September 30, 2023. Highlights and outlook include:
“On the strategic front, our acquisition of the rights to the vacation ownership business of Sports Hospitality Ventures sets the stage for future growth as we build out a new network of sports-themed destinations in popular college towns and leisure destinations under the Sports Illustrated Resorts brand, starting in Tuscaloosa, Alabama.”
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September 30, 2023 10-Q SEC filing: Sports Illustrated Resorts Agreement
On September 11, 2023, we entered into an agreement to acquire the rights to the vacation ownership business of Sports Hospitality Ventures, LLC (“SHV”), a hotel and resorts licensee for the Sports Illustrated brand. Together with SHV, we introduced a new concept for a network of sports-themed resort and lifestyle complexes in popular college towns and leisure destinations. The new resorts are anticipated to be developed using an asset-light development financing model. The first resort in the new business line is expected to open in Tuscaloosa, Alabama, in late 2025. There is no immediate earnings impact for us, but we expect this business to drive incremental growth starting in the second half of 2025.
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October 6, 2023: T+L Rings The Opening Bell® on the NYSE:
Eastern Band of Cherokee Indians & “Their Hard Rock Moment”
February 3, 2023 -- Johan Lossiah | Cherokee One Feather: CHEROKEE, N.C. – Kituwah, LLC will be investing more than $300 million over the next four years in a deal that will see them become part owners and operators of Sports Illustrated Resorts.
The deal will see Kituwah, LLC invest $75 million per year for the next four years, with each of those installments going toward an individual new resort that will be built from the ground-up. The enterprise will also be investing $7 million in initial equity, giving them 37.4 percent in effective equity partnership and 50 percent control of Sports Illustrated (SI) Resorts. That percentage makes Kituwah, LLC the largest equity holder in SI Resorts.
The final part of the deal are two loans that Kituwah, LLC is offering to the business to assist with the launch of the brand. One is a $5 million loan that has a two-year grace period and a 12 percent interest rate. The other is $4 million and an 8 percent interest rate but has no grace period.
Mark Hubble, chief executive officer of Kituwah, LLC, said that this could be a watershed moment for the company and the Eastern Band of Cherokee Indians (EBCI).
“Since another tribe obtained a worldwide brand, which was the Hard Rock with the Seminole Tribe, this tribe has actively looked for a brand that they could develop. It’s taken a lot of connections and a lot of time, but I think this is their Hard Rock moment. I think our brand is at least as strong a brand as the other major brands that are out there, including Hard Rock. It is the most trusted name in sports…so, the brand name is Sports Illustrated Resorts,” said Hubble.
The primary partner in operation is Experiential Ventures. They describe themselves as ‘a team of hospitality, food and beverage, branding , retail, design, entertainment and real estate leaders who have worked with some of the most iconic brands in the world’. Those brands include Condé Nast, Emmitt Smith, and The GARAGE.”
“Sports Illustrated Resorts looks to build their brand as fast as possible. According to Hubble, the goal is to establish a significant base over the next three to five years. This is evidenced by the strategy of continuing to build and rebrand new resorts while other projects are under construction.
He said that one of the most unique aspects of this deal is the ability to go public. He said that even if Authentic doesn’t decide to go public with Sports Illustrated, SI Resorts will have the option. Hubble said that is quite unusual for a deal like this.
“We could take that public. If we do, that’s a multi-billion-dollar transaction. That’s probably going to happen within the first 10 years. I don’t like to use those forward-looking statements, but that brand will have so much value.”
Authentic will have the ability of exercising a warrant option in the case that SI Resorts does go public, and that would result in a 2 percent dilution. That number was reduced down from 5 percent in the final agreements. Authentic accepted 5 percent equity upfront as part of the deal to reduce their claim to warrants.
This deal greatly increases Kituwah, LLC’s footprint. In a report to Tribal leadership, the company stated that they will be making their first dividend distribution to the EBCI in the first quarter of 2023. That same report claims that those dividends are expected to grow to $5 million annually during this year.
SI Resorts will be looking to build every year and will likely be rebranding other resorts at a similar frequency. Hubble said that he is excited to announce each of these deals as they cross the line and will continue to offer updates as the company grows.