Sports Illustrated Teams Up With Fox Sports for Ad Deal – Wall Street Journal

Sports Illustrated and Fox Sports have signed a new multiyear advertising and editorial agreement that they hope will provide a more robust competitor in a digital sports media landscape dominated by ESPN.

Under the arrangement, Sports Illustrated, which is owned by magazine giant Time Inc.,
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and Fox Sports, owned by 21st Century Fox,
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will share “significant” content, according to Rich Battista, president of Time Inc. Brands.

A breaking news article from Sports Illustrated might also get posted to Fox Sports’ site, for example, while Fox could syndicate video highlights to Sports Illustrated’s properties.

Meanwhile, the ad sales units from Sports Illustrated and Fox Sports will be able to sell advertising across both entities, and the two companies will share in the revenue. They declined to disclose specific financial details.

Combined properties operated by Sports Illustrated and Fox Sports brought in about 68 million unique visitors in July, which would make it the second-largest sports publisher behind ESPN, which brought in about 79 million visitors, according to digital measurement specialist comScore.

On their own, Fox Sports ranked third in the sports category in July, while Sports Illustrated came in 10th, according to comScore.

“Scale really matters in this business,” Mr. Battista said.

The deal comes as Fox Sports 1, a network launched as a competitor to ESPN in 2013, retools its programming to focus more on personality and argument-driven sports shows. “As we’ve scaled back because we don’t believe in highlights and news as TV programming, that’s also created a little bit of a hole on the digital side,” said Pete Vlastelica, executive vice president of digital for Fox Sports.

Adding Sports Illustrated articles written by “journalists with a capital J” will help address that shortfall, Mr. Vlastelica said. “Fox Sports’ digital editorial strategy has been driven by shareable social news and short-form social video. We’re not newsbreakers necessarily.”

The pair also will work together on editorial projects, and Mr. Vlastelica said they are kicking around ideas surrounding the Sports Illustrated swimsuit edition, NFL football and U.S. Open golf.

Though they will remain separate websites, Sports Illustrated and Fox Sports will combine their comScore web traffic under a yet-to-be-named brand, which will be considered a part of Time Inc.’s overall traffic. Media companies often place their comScore-measured digital audience with another publication through this process, known as “traffic assignment.”

It’s far from clear whether the tie-up will resonate with media buyers. “They have great content, but it’s very difficult to compete for eyeballs right now in the sports space,” said Niki DeCou, vice president and brand group director at Horizon Media.

Ms. DeCou said she’ll be curious to see if the greater scale from the deal results in a price drop for video advertising, which she said is expensive right now at both companies because they have less inventory to sell than ESPN.

The deal also marks one of the first major moves by Mr. Battista, who joined Time Inc. last year and was promoted in an executive shake-up last month. (Earlier in his career, Mr. Battista worked at Fox.) The Journal reported earlier this month that Time Inc. was planning to lay off more than 100 people across all areas of the company. Five people were let go at Sports Illustrated in recent days, according to a person familiar with the matter.

21st Century Fox and News Corp,
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parent company of The Wall Street Journal, share common ownership.

Write to Steven Perlberg at steven.perlberg@wsj.com