Walt Disney Co., Hearst Corp. and Petersen Publishing Co. are discussing a partnership that would combine their considerable clout to launch a weekly, ESPN-branded competitor to Sports Illustrated next year.
The venture being discussed would merge ESPN Total Sports--a joint venture of ESPN parents Disney and Hearst--with Petersen's monthly Sport to form ESPN Sports Weekly. Petersen would be the alliance's general partner.
In a twist sure to turn heads in the publishing industry, the deal would put Claeys Bahrenburg, new chairman-CEO and part owner of Petersen, back in business with Hearst a year after he was removed as president of its magazine division.
Mr. Bahrenburg is moving quickly to strike a number of deals for Petersen, which he and a group of investors acquired earlier this month for more than $400 million. Mr. Bahrenburg declined comment, but a number of executives said that in addition to the sports magazine deal, he is in direct discussions with Disney President Michael Ovitz about a number of far-reaching alliances.
These could include brand extensions based on Petersen titles, including ESPN programs derived from Golfing and Motor Trend.
None of the companies involved in the discussions would comment on them, but a partnership linking the three companies would give ESPN considerable muscle in its battle with Sports Illustrated. Time Warner's powerhouse is teaming with new sibling CNN to launch a 24-hour sports news network, CNN/SI, in December that will be a rival to ESPNEWS, launching in November.
Messrs. Bahrenburg and Ovitz were both at the American Magazine Conference in Bermuda last week, as were Hearst Magazines President Cathleen Black and top executives of Hearst's magazine development unit; it isn't known whether the venture was discussed there.
MAY ARRIVE NEXT FALL
An agreement to publish ESPN Sports Weekly Inc. could come as soon as next spring, with a rollout of the title by fall 1997. While the magazine would be a direct competitor to SI, its goals wouldn't be quite as ambitious. Targeted circulation would be under 2 million, compared to SI's nearly 3.4 million.
Also, despite the weekly name, the magazine would probably be published about 40 times a year, a schedule that allows it to avoid seasonal ad declines.
Sport had a circulation of 774,750 for the six months ended June 30, according to Publishers Information Bureau, a 7.4% rise from the same period last year.
In ad pages, SI also has a considerable lead. It carried 2,116 in the first nine months of the year, according to Publishers Information Bureau, up a healthy 15.4% from the same period in 1995. Sport carried 295 pages for the period, down 9.8%.
But Sport also has new owners and new management. Mr. Bahrenburg, new Petersen President Neal Vitale and new Petersen Holdings CEO James Dunning are expected to move quickly to bolster the company's stable of more than 30 special-interest consumer titles. All three were visible presences at the magazine conference.
While the hurdles to launching a competitor to the SI juggernaut would seem dauntingly high, the ESPN name provides a powerful launching pad in the sports market. The costs and risks associated with launching a mass-market weekly are considerable. The partners could easily spend more than $100 million getting ESPN Sports Weekly off the ground.
QUESTIONS ON HEARST
The big unknown in the partnership agreement is whether Hearst will want a continuing role. The company specializes in monthly magazine publishing and weeklies have a very different economic model.
Because of its 20% stake in ESPN--Disney owns the remainder--Hearst will be involved on some level. But it's possible the magazine group will pass on the project, leaving ESPN to proceed on its own, with Petersen or with another partner.
ESPN Total Sports has published eight themed test issues so far.
Copyright October 1996, Crain Communications Inc.