Sports Illustrated, Turner Sports Take Aim at ESPN With New Digital Partnership

In a move targeted squarely at ESPN and other major sports-news outlets, Turner Broadcasting System and Time Inc.’s Sports Illustrated Group have announced a strategic digital partnership that will combine SI’s editorial prowess and online presence with Turner’s profusion of sports-video rights and production capabilities.

In combining their efforts, the two Time Warner companies hope to spawn a bona fide online sports-news challenger to the self-proclaimed World Wide Leader in Sports. David Levy, Turner’s president of sales, distribution, and sports, is confident that the new partnership can do just that. “Short and sweet: by combining our assets and resources, Turner and Sports Illustrated are creating the preeminent online sports destination. Period.”

Under the agreement announced Monday, Turner Sports will be redubbed Turner/SI Digital and oversee all business and technical operations, ad sales, product management, and marketing for SI.com and Golf.com.  The sites join 19 other online destinations already under the Turner Sports umbrella, including the NBA Digital portfolio, NASCAR.com, PGATour.com, PGA.com, and Yahoo’s NBA, NASCAR, and golf sites. Sports Illustrated will continue to manage its own editorial content across its print, online, and mobile platforms.

It’s All About the Rights
Covered in Turner Sports’ stable of sports-video rights are the NBA, MLB, NASCAR, PGA, and, following a landmark 14-year, $10.8 billion deal with CBS and the NCAA, the NCAA Division I Men’s Basketball Championship beginning in 2011. These assets will go a long way in establishing the video presence that SI.com has lacked in the past.

“Digital video was obviously a [major aspect] in this agreement,” says Mark Ford, president of Time Inc.’s News & Sports Group. “We did have some deals for video, but nothing on the scale of what Turner was doing. So we needed to find a partner to fill that hole, and we’re delighted that Turner is that partner.”

Although several of Turner’s sports-video packages include rights to live streaming of games, when asked if there are plans to stream live sports on SI.com or Golf.com, Ford responded, “Not as of today.”

Pushing Traffic and Scale
Although Sports Illustrated’s online presence has grown by leaps and bounds over the past five years, SI.com has failed to gain the massive audiences and scale of online sports leaders like ESPN.com and Yahoo Sports.

“We didn’t have the scale,” says Ford. “We did really well in attracting consumers and attracting advertisers, but the fact was, we were no. 6 in overall unique visitors and traffic. Now with Turner, we’ll be the leader in sports in scale.”

According to Ford, SI.com attracts about 13 million unique visitors monthly, good for sixth among sports sites. However, by joining forces with Turner/SI Digital’s battalion of sites, that number skyrockets to 40 million uniques, well ahead of Yahoo Sports’ 35.9 million, ESPN.com’s 25.4 million, and FoxSports.com’s 23.5 million visitors (based on May 2010 ComScore data).

“The sales force can sell across all these other digital sites and be able to aggregate,” says Levy. “When someone wants to buy Men 18-34 for sports, think about the 40 million uniques that are now available for that particular product. That simply wasn’t available just through SI.com.”

Growing the Brands; Avoiding Past Mistakes
Repercussions of this deal are not limited to the digital realm, however. SI writers will receive extensive exposure on Turner’s TBS, TNT, and TruTV sports coverage, while Turner gains a valuable sports brand to market across its many platforms.

“By getting our writers out to broader audiences and getting our brand out to broader audiences, which this deal allows us to do, the brand halo effect on SI is huge,” says Ford. “It really begins to allow us to compete on a much higher level with consumers. That is one area that we were really focused on when we did this deal.

However, SI has been here before and washed out. Its CNN-SI network during the late ’90s struggled to gain a foothold in the sports market, peaking at just 20 million homes, and closed shop in 2002. When asked why the Turner-SI partnership would succeed where the much-maligned CNN-SI network failed, Levy says, “The difference is, there’s going to be opportunity to extend the visibility of SI.com through major TV networks, which was not the case before.”

Turner’s growing portfolio of sports assets has made the company a major player in the sports market over the past decade, but, unlike ESPN, it has yet to attain success in the general sports market on a year-round basis. With ESPN’s continued growth and the potential of a Comcast-NBC Universal sports network on the horizon, Turner felt it was essential to tap into this general sports market and saw SI as the ideal vehicle to do so.

“This gives us the opportunity for Turner to sell in the general sports marketplace throughout the calendar year,” says Levy. “We now have opportunities to sell NHL, NFL, all the other sports properties that we have been unable to sell in the past. We also have the opportunity to aggregate all these impressions across these branded sites.”

Mobile Challenges
The mobile aspect of this deal is perhaps the most intriguing. Sports Illustrated will continue to oversee paid applications for mobile devices, while free-to-download apps will be Turner’s responsibility. This is partially due to the fact that several of Turner’s rights agreements forbid the use of video within a paid-subscription model, preventing its being used in any mobile app that requires payment.

“A lot of our video rights don’t allow us to do a subscription model,” says Levy. “Some of these deals only allow us to do an ad-supported model with the video. A lot of that content cannot show up on the other side of the equation. So the [pay side and free side] are going to be different and unique.”

Sports Illustrated’s heralded iPad application has created extensive buzz within the mobile community and has provided hope to a subscription-magazine industry that is gasping for air. The Turner partnership would seemingly offer a valuable hub of sports video to the iPad app and other mobile platforms. However, the non-subscription clauses in some of Turner’s rights deals prevent this video from being used for SI’s iPad subscription app.

“There will certainly be a lot more video capability and video content for the applications that are run through SI.com because they are ad-supported,” says Levy.

The Next Great Chapter
Despite the challenges that lie ahead, Ford and Levy seem confident that the two companies’ long-awaited partnership will greatly benefit all involved.

“Without question, this is a transforming moment for SI,” says Ford. “We’ve spent a lot of time in putting this partnership together. I think it’s the next book in the series of the great history of Sports Illustrated. And one that will prove to be highly successful.”