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Sports Illustrated Prepares Its First Fantasy Sports App, Complete With Betting

Cuts of Wagers Could Open a New Revenue Stream for the Magazine

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The new Sports Illustrated mobile site, which debuts Tuesday.
The new Sports Illustrated mobile site, which debuts Tuesday.

Sports Illustrated plans to roll out its first fantasy sports app in late June or early July, an effort to tap the billions of dollars that consumers spend on fantasy sports annually. The app, Fan Nation, will allow users to take part in the fastest growing segment of fantasy sports, daily play, where participants select a new team each time they play and then square off against a friend or random competitor.

The first game offered through the app is "Baseball Throwdown" and involves Major League Baseball players. Sports Illustrated plans to offer similar games with players from the NFL, NHL and NBA.

Executives at Sports Illustrated, part of Time Inc., are hoping to bring on sponsors for the app, but it also offers the magazine a potentially new revenue stream.

The app lets users bet money that they will win their match, although Sports Illustrated labels the bet an "entry fee," and pays winners their money back plus their opponent's bet minus a "contest management fee." A successful $5 wager, for instance, reaps $9 for the winner.

"Our audience wants to play fantasy sports," said Jim DeLorenzo, VP-general manager of Sports Illustrated Digital. "The mandate is to make the experience so easy that even my dad could use it."

Thirteen percent of American adults take part in fantasy sports, according to the Fantasy Sports Trade Association. And it's big business in the U.S., where participants spent $3.38 billion on products, services and entry fees in 2012. Daily play is fueling much of the industry's growth.

"It's gotten more investment in the past two years than in the history of fantasy sports combined," Paul Charchian, the fantasy sports association's president, told Bloomberg in January.

Sports Illustrated worked with Topline Game Labs, which created the app. Topline Game Labs is led by David Geller, who was the head of Yahoo's fantasy sports business until 2012.

For Sports Illustrated, the app is part of a broader digital push beginning Tuesday with the introduction of a redesigned desktop and mobile site and followed later in the week with the rollout of the streaming video network 120 Sports.

The new SI.com will lean heavily on photography and video, with a mix of pure text headlines and the image-driven tiles that are en vogue in web publishing lately. It's also designed to be "mobile first," another popular mantra among publishers as mobile use grows quickly.

Sports Illustrated has brought on three new advertisers for the site: Black Rock, Canon and New Balance. Brendan Ripp, Sports Illustrated's publisher, is planning to pitch the new site to other brand marketers and agencies in late July. "We want to go out and show off the site's capabilities," Mr. Ripp said. "But we also want to do a lot of listening to learn how brands want to work with us."

The magazine has also hired about 20 editorial staffers in the last six months in an effort to double the amount of web content it publishes, according to Sports Illustrated Editor Paul Fichtenbaum. Eighteen months ago, Sports Illustrated melded its web and print staff into one, a move that has "energized staff," Mr. Fichtenbaum said.

The new Sports Illustrated website.
The new Sports Illustrated website.

Other Time Inc. titles such as Time and Fortune have hired additional editorial staffers to publish more content to their own newly redesigned websites. At the same time, however, Time Inc. has warned investors that it might need to lay off staff . People magazine, which is Time Inc.'s top revenue driver, shed about a dozen staffers earlier this month through layoffs and buyouts.

Earlier February, Time Inc. restructured, resulting in almost 500 job losses.

Sports Illustrated is one of Time Inc.'s best known titles and has historically been among the top five or six revenue drivers at Time Inc. But its print fortunes have diminished along with those of other weeklies.

Print ad pages at Sports Illustrated are down nearly 8% through the week of June 23 compared with the same period last year, according to Media Industry Newsletter, though the magazine has published one fewer issue this year. Pages fell 6% in 2013.

So it's looking to the digital space to spur revenue growth, a key strategy for Time Inc., which was spun off from parent Time Warner earlier this month to become the only pure-play magazine company to trade publicly on the New York Stock Exchange.

Sports Illustrated attracted nearly 20 million unique visitors to its desktop and mobile sites in May, a 49% boost compared with May 2013. By comparison, ESPN.com drew 68 million unique visitors, Yahoo Sports-NBC Sports Network got 56.3 million and Bleacher Report-Turner Sports Network attracted 55.4 million.

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