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The Medium Rules: Aggregating and Innovating in Publishing with James Heckman, CEO of Maven

On this episode of The Medium Rules, I sit down with James Heckman to discuss his business philosophy animating Maven, as well as a look back at James’ career to date. Maven styles itself as a technology solution for publishers, centralizing and optimizing virtually all functions of a publishing business, from sales and marketing all the way through to legal and finance. And Maven is roughly modeled on two prior ventures founded by James, Rivals and Scouts, both sports-based publishing properties based on a similar “hub-and-spoke” approach to the publishing business in a digitally-native world. In this wide-ranging, informative and engaging conversation, James and I cover prior successes and failures, James’ keys to success (net: strong team, reliable investors and high-quality partners), and what the future holds for Maven and the various brands it now owns and/or controls.


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The Medium Rules Aggregating and Innovating in Publishing with James Heckman CEO of Maven

Alan BALDACHIN: From the HBA podcast studio in New York City, welcome to The Medium Rules. I’m Alan Baldachin.


So when you took in some of these businesses, did you ingest, let’s say, their sort of standalone, siloed ad sales marketing?


James HECKMAN:  That’s a great question. And again, kind of brings controversy because it’s so revolutionary, right?


BALDACHIN: So B. Riley, basically how market those pipes early on, they were involved that early?


HECKMAN:  Totally. And they’re amazing. You should, you know, that company…


BALDACHIN: Well, I’ve gotten to know them a little bit, but obviously they’ve done a great job with Maven.


HECKMAN:  Yeah. Now, have we not performed, they probably are real tough people.


BALDACHIN: Maybe. Delighted to be joined in the HPA podcast studio today with James Heckman, CEO of Maven, which is a shared digital publishing advertising and distribution platform for publishers, which recently made headlines when they acquired both The and Sports Illustrated months apart in late 2019. Ambitious? Check. Controversial? Check.

But judging by Mavens fourth quarter 2019 results, Maven is a public company, which we’ll discuss also. Maven’s vision of digital publishing economics seems to be paying off, as Maven announced financial and digital numbers that exceeded expectations by quite a bit. In a digital publishing universe with a small number of winners and many losers, and notable mainly for its severe compression, how are James and his team pulling this off? Let’s get into it.

So James, welcome. Thanks very much for coming in.


HECKMAN:  Great to be here.


BALDACHIN: First of all, congrats on the Sports Illustrated acquisition. I mean, that’s a huge announcement, a major coup. And we’ll get into a little bit of the detail of how you guys pulled that off and how that’s doing and what it brought to the table at Maven. But first, let me ask you; going into SI lor, do you have a favorite cover that you would look back on, anything you would point to as a kid?


HECKMAN:  Well really, a couple of them, it wasn’t necessarily the covers. But the stories that really, I think touched my life in a couple ways. One was very specific to my career, and the other was just waking up to great journalism. And the recruitment of Marcus Dupre was an amazing story to me to find out how aggressive and excited and passionate college fans were, where they were handing out in aggregate millions of dollars for these high school kids, and reading about them getting cars in the competition. And obviously, we revolutionized that whole industry and consolidated all of the college publications onto a single platform, and the core for subscriptions on that was college football recruiting.


If you’re not from the south, you didn’t go to a major university. You don’t really understand how big but there’s about 50 universities where each one of them are doing one to $400 million in revenue every year, and it comes down to the kids that decide to go to your school. So that was a big deal.


And Marcus Dupree, in particular is one of the greatest talents out of high school. And he was just so overhyped that he built his head up and ended up kind of flaming out, but it was just an incredible story. And a story they broke, right, because you had to find out stuff that was not legal from an NCAA standpoint. So that was a big deal.


I think the second one that was amazing, was Chuck Muncie, that they got that story, and I remember picture of his face on the cover. And he was freebasing cocaine before games and practices. That was kind of an era. I don’t think people freebase anymore. They’re probably have more sophisticated ways of taking drugs. But it wiped out his career and turned out you know, cocaine was a big deal back then. And I remember Don Rogers dying from cocaine, and just that whole 80s thing that SI had the type of journalists that could just get into…It was probably the best running back in the NFL at the time. And it was great journalism. And they really were in the inside.


BALDACHIN: Great writing talent.


HECKMAN:  Great talent. And what we’ve learned is when you have that brand, pretty much anyone wants to be featured in Sports Illustrated, and you know, we’ve obviously modernized it. And as you said, have already had a great year so far. But the brand carries so much weight, it attracts journalists. People expect great journalism. Athletes want to be featured. They want to open up. They show up to our persons of the year, they show up to our Super Bowl events. They want to be photographed, and that goes from high schools to up.


And I think the problem, which is really the problem with major media, is that being a great journalist doesn’t mean that you are a rocket scientist. Being a great journalist doesn’t mean in this era that you can reach half a billion people. And in the days before the internet, just being SI meant people would walk into the newsstands or get a subscription. And so there’s this massive gap in terms of the need to modernize Sports Illustrated. And that really, is how all the people that have been with me and you know, one person who’s just started SI started with me in 1989. We’ve been doing one thing, and one thing only, and it’s everything except the journalism. And we do it all.


And again, being a great writer doesn’t mean that you have access to advertising dollars or that you’ve got the ability to build great technical infrastructure, the ability to integrate with advertising. And so what we started back in the 80s from Seattle, digital publishing was founded there, that’s where, if you can remember Pagemaker. Star Wave came out of Microsoft. Real Network. was the first digital video platform. Encoding, a couple fraternity brothers of mine from University of Washington was the first video encoders.


And we were buying computers in Seattle before people were even thinking about computers. And so digital publishing was something that I got into in 1984, started publishing your books for colleges, and eventually ran the Press Center for Ted Turner for the Goodwill Games in my early 20s. And maybe it’s like the people who started doing airplanes or cars, you know, you’ve got to be in your early 20s or late teens to do something that crazy to take those kinds of risks. And we went all in and digital publishing.


And eventually I took over every NFL season ticket holder magazine, and I just remember this amazing moment sitting with a CMO of Lexus, and just to kind of tell you a full circle. I held up a Sports Illustrated, lay it on the table, and then I held the NFL Exclusive. We had 30 magazines for 30 teams; Jaguars and Titans weren’t there yet. And I said, “What’s your favorite team?” And he said, “Raiders,” so I held up the LA Raiders, because they were in LA at the time I held Sports Illustrated. And I started flipping the pages and I said, “Tell me, left and right if you’re interested in the article.”


BALDACHIN: Tell me when to stop.


HECKMAN:  Yeah, SI, they had one story he liked, but he liked every page for the Raiders, because he’s a Raider fan. I said, “Which page you want to be on, on SI? He said, “Well, only that page.” “But what about LA?” And we had the technology, it was the first network publishing system, and it was before the internet, where the writers would produce the content for the NFL teams. And we had 30 different versions on a single platform period at the same time. We really started a company then which was national distribution, arbitraging that national reach by going national advertising and a technical infrastructure to do all the work so that the brilliance of the writer could properly monetized.


BALDACHIN: So James, this is 80s we’re talking about now? So this is print, or this is digital?




BALDACHIN: Yeah, because this was pre-internet now.


HECKMAN:  Right. So first we did year books, and that was super early. We were really the first to do premium color digital publishing. Then the Goodwill games in 1990. That was kind of a daytime breaking moment. And so we ended up beating the Seattle Times for that contract and did 18 magazines in 18 days, all color. Then in 91, we won an NFL contract and in 92, NCAA. So we ended up eventually having hundreds of magazines all operating with just a handful of people, so pre internet.


So that was really the first kind of ad network, it was the very first, I would call pre internet blogging platform. And we had all the engineers we wanted to Seattle because they monopolized engineering. There was no Google, there was no Yahoo. You know, it was all sitting in Seattle. And so a lot of it was just fortune, and just being at a university city where all the Microsoft engineers are being built, gave us a focus. I knew that we couldn’t create content for the New York Giants. The Giants told me who they wanted to cover them, right? We knew that Notre Dame, we weren’t going to try to write about Notre Dame.


And so what happened is we submitted and gave up the idea that we were the experts at the local and microscopic level. And so the first notion of a digital blogging network was really our company in a way pre internet, and that it rivals, of course, we had 1500 sites on a single platform. And that was really the first large scale, single platform network. SoftBank was my partner and News Corp and Intel, and it was all very, very edgy stuff. But in the end, we passed ESPN in pageviews by 2001. Because when you combine the local passion, or when we think about blogging, maybe writing about crypto or Trump or climate change or whatever, everybody has their passions. And as you know, you’ve got your family, you’ve got your job, and you’ve your passion. And people don’t have 8000 passions. And so if you get the right expert to cover that passion, it’s way better than journalism coming out of one office and one brand.


And so back to full circle, SI has been stuck in the 80s, from a business model standpoint, trying to cram everybody onto a sports portal. But being all things to all people doesn’t work anymore. That’s not how the content is consumed. And they’re trying to stuff news into a magazine and again, that ended maybe sometime in the mid-90s. And so what we’ve done is we’ve taken our technology that we’re operating for hundreds of great journalists—It’s misunderstood and controversial. But we have liberated and provided sustainability for the most brilliant journalists who will write about climate change or Trump protest or Dallas Cowboys or crypto. And they can’t do it on their own because they don’t have the national reach. They don’t have distribution. They don’t have a budget. They have technology. And as you know, this phone has 20 different platforms, and it changes every day; Microsoft and Google changes its algorithm.

So we were able to we had these stunning numbers in the fourth quarter is essentially modernize SI in 30 days. We rip them out of their old platform. And instead of one portal with everything stuffed into it, we already have 100 Sports Illustrateds. Our number one site is the Dallas Cowboys.


BALDACHIN: SI isn’t America’s team. Let me back you up, and let’s walk through that a little bit. So rivals get started when…And the animating idea of rivals is really what you just described, which is we’re going to have multiple, multiple what? Points around a single platform?


HECKMAN:  Yeah. So we really think about it. I mean, it’s great way of putting it in just a little more specificity. We believe in ownership. And I’m probably not excited about people cutting paycheck, we want them to be invested in what they’re building. And so we’re going to come out with –I’m really excited about working with the union— a revolutionary model where their workers are not just kind of paycheck, but are going to actually be able to get yield out of the profits and the success of our new business model. And I think we’re turning around that conversation, but to be specific…


BALDACHIN: Just about that, the unionized SI writers, you’re talking about, right?


HECKMAN:  Correct.




HECKMAN:  But I think what’s happened is thousands and thousands of journalists jobs have been lost in the last few years. And we’re providing new hope and new opportunities. So if you are covering the Dallas Cowboys working for the Dallas Morning News, the salary’s shrinking and the jobs are going away. We brought in Mike Fisher, who’s the most well-known journalist in Cowboys, and this is kind of a test case here, an example, and we built a business from Mike Fisher. He in four months already has added a million users to business that didn’t exist just four months ago, making good money. And within our system, it’s an SI brand Sports Illustrated could never cover the Cowboys sufficiently here in New York. And now we have the best Dallas Cowboys reporter working for Sports Illustrate but operating a Cowboys website.

And so effectively, we’ve got roughly 100 Sports Illustrated websites. That’s how people consume. And Jim Cramer went from having one Street site. He actually was our first independent journalist. We’ve spun him out, and he’s got his own way. He’s got two websites; he’s added a third. He’s now talking about fantasy football with us just to connect SI and the street.


BALDACHIN: That’s incredible.


HECKMAN:  Yeah. But he owns three businesses. So at the end of the day, we want to free a journalist to have a great sustainable business with a future where they build their audience, they own their own audience, they own that relationship. And I think with the monopolies like Facebook, Facebook kind of steals that data. You kind of have to play by debilitating rules. So because we had worked with these journalists back in the 80s, and 90s, because we learned that we wanted to save money on paper and postage, and we converted all those sports magazines to websites, we learned that we could efficiently run it, we could bring in a lot of money because we’ve got you know, all the engagement plus all the broad reach. And we had great technology because that’s where we spend our money. Somebody could step in at Notre Dame or step in at Alabama or Dallas Cowboys, and immediately made money with us at rivals.


And that was really the first large scale social network, that and silicon investor was the first large scale blogging network. And we’ve just run several businesses like that since. We built a subscription network called Scout, which athletics has essentially copied. We built a company called five to one, which was a single platform; BBC, Fox, Disney, AOL, Yahoo all got together on our platform and became a very big company at Yahoo. But independent media companies, sharing a platform, sharing technology, sharing distribution, and having a one stop shop ad buy has proven to be a very sustainable model over the last 30 years for us.

BALDACHIN: So when you took in some of these businesses, did you ingest let’s say, their sort of standalone siloed ad sales, marketing, how did you kind of rationalize all those things when you’re bringing these teams in?


HECKMAN:  That’s a great question. And again, kind of brings controversy because it’s so revolutionary, right? You know, History Channel was losing money digitally. We came in and took over the digital group, started selling advertising for them. They immediately get cost savings. We’re doing the billing and the collecting and basically giving money back to History Channel, Biography, Yoga Journal, Ski Magazine, Oxygen, Rachael Ray, Sports Illustrated the street.


So in every conversation, people will say, “Hey, we would love for you to do advertising for us,” or “Yeah, we’ll take a distribution deal, or we’ll do this.” We’re very strict in our discipline. We have a world class team of engineers from Google and Microsoft and Yahoo, and Amazon. And we run this platform efficiently. And so to answer your question, specifically, at SI, we took over finance, we took over operations, we actually injected our subscription person who had been in print subscriptions forever. Middle management layer is typically removed. All engineers disappear. Anything that’s duplicative of our infrastructure.


So in one hand, you could say, well, that’s terrible. What about the last jobs? But it literally is saying it’s terrible that horse shoemakers and horse buggy wouldn’t make it?




HECKMAN:  You know, we’re an infrastructure that can come in…Immediately, Sports Illustrated saw an uplift in revenue, in traffic, download speed went up, ad agencies all of a sudden showed up to the door, “We’re ready to give money to Sports Illustrated because it’s part of bigger scale.” Everything improved immediately, right? And you don’t need two CFOs, you don’t need two COOs. You don’t need two subscription managers. You don’t need two technologists, right?


And so, by deduping what I would say overhead, we were able to announce—you saw it— we saved, in a lot of areas we came up with $27 million of operating expenses came out, traffic went up, engagement went up, revenue’s gone up, print subscriptions, even though we moved it to a more efficient monthly model, not covering news, but now covering feature articles. The subscriptions keep rolling in. And that’s what we’re doing to the street.


BALDACHIN: Take a guy like Kramer, is there any concern that he would feel…? I mean, he’s already got an audience, but is there a concern somebody would sort of take advantage of the platform, build up an audience and then break away?


HECKMAN:  Oh, totally. And in fact, we say this lovingly no different than sometimes happens in sports, we say we’ve created a lot of monsters, but it’s kind of good, right? A little thing about Duke basketball for those basketball fans, everybody complains, you know, they bring in these great players, they win a national title, then they go into the NBA. I mean, let’s just go on…You went in it, you get a national title. And then you get to point to them and say, “Look what Duke did for that person. You want to win a national title and go to the NFL?” So we look at it very positively, and come on in. Let us build your company. And if you sell it to Disney or Hearst, make sure we get to come to the party.




HECKMAN:  Say good things about us.


BALDACHIN: Tell your friends.


HECKMAN:  Right, but I think…


BALDACHIN: That’s fair.


HECKMAN:  To be honest, it’s infrequent. Certainly, Jim Cramer is already a legend. I think what he would say if you asked him is that more people are reading his stuff now. You know, even though we cut significant out of the streets overhead. We’ve increased subscription revenue from 19 million to 21 million run rate. We’re bringing in advertisers that have given up on the Street a long time ago. The download time on their pages is great. And we’ll be building out a Street network similar to what we’re doing at Maven.


And so we love Jim Cramer. But we also think that he’s enjoying the fact that as opposed to him worried about finance and middle management, and why is the technology not working better and having to go to ad sales meetings, and… I mean, it’s exhausting to be a brilliant creative, and also have to worry about business operations. I mean, even if they didn’t make more money, I would say, it’s just a relief.


BALDACHIN: Yeah. Right.


HECKMAN:  I mean, so the ones that end up being great at business operations, they start cutting into their focus on creativity.


BALDACHIN: So it’s really… I mean, would you guys, we’ll stay on this for a moment, would you look to add additional sort of tentpole titles? Or are you kind of taking a pause with what you did second half of 2019, focusing on building that network out and continuing to add Mavens at maybe some of the lower tiers?


HECKMAN:  That’s a great question. Well, first of all, we have so much work to do. And I think we’re creating so much disarray and chaos in the market coming in here as tech people from the west coast and coming into New York and…


BALDACHIN: Stepping all over the…


HECKMAN:  Stepping all over…Like, who are these two guys? And you know, that’s been a lot of fun, but…


BALDACHIN: It’s pretty interesting.


HECKMAN:  Yeah, I mean…


BALDACHIN: Very compelling.


HECKMAN:  Look, people get angry when they’re afraid. And I think everyone at Sports Illustrated knew that they were living in a cadaver, and the eyes are opening, I think the attitudes are lifting. And it’s just undeniable when you see your traffic and revenue and everything getting better, and we know that in the end, people are going to delight in Sports Illustrated like they have since the 80s. And most of it’s from our business model and technology, and then we take the brilliant creatives sitting there yesterday with a…In a union discussion with a Sports Illustrated employee. And he said, “The bottom line is we just want to be read.” Jim Cramer told me the same thing.


BALDACHIN: And have stability. That’s it, right. Those are the two things.


HECKMAN:  We turn that thing profitable and went from 20 million viewers to 30. Year over year, they were 13 million, we’ll finish the month at 30.


BALDACHIN: They cannot complain. Are you guys doing, in terms of revenue, are you doing sort of, I guess, bigger ticket marketing programs, or is it principally just driving traffic and programmatic? Or is it somewhere in between?


HECKMAN:  Well, it’s a lot of things. And I think when you’ve got scale, you’re able to do a lot of things well. The incremental work for us to add Street in the discussion with ad agencies is really zero. It actually makes it easier for us. And so I think we’re doing very well in direct sales. We’re doing very well with PMPs, so private marketplaces, because we have big scales and big brands and quality journalism. We are increasing pageviews or inventory per session, because the load time is so fast. Again, it doesn’t take us extra work to have great technology, right?

Google recognizes we have authentic journalists, that we’re not aggregating, we’re not doing linkbait, we’re not tricking people to come to the page. We actually reduced ad load. So we’ve reduced the amount of ads on the page, but revenue is going up. And it’s because consumers are not waiting as long to read it. And so if they can consume three pages instead of one but we reduce the ad load by half, we actually have more inventory, right? So more inventory with faster add loads.


I think the design is better for people to find stuff. Now that we have a network of sports sites, if somebody is on the Cowboys, and we put up a fantasy story, now all of a sudden, we’ve created internal distribution. So there’s all kinds of network effect things that don’t take incremental investment or work. And so a lot of things end up doing well.


Let me answer your question I did a bad job earlier on, you know, are you going to pause here? So, got a lot of cleanup work, a lot execution, a lot of cultural work, turning an old school media company into a tech-minded company. So I would say we’re going to do some slowing, but we’re very aggressive company. At the end of the day, we’re focusing on making sure that we’ve got a great brand for 34, 35 verticals, so crushing it in sports right now. Finance is growing, we’re going to accelerate that.


History and military, by the way is huge, right? There was a time in history channel actually had more traffic to it than ESPN. So, news has become…We’re going to do news. But news has become so controversial and divisive that a lot of brands are pulling out. That same mature adult educated audience, are the same audience that read history, follow military, things that are non-partisan. And so we think we have a great opportunity in the history space to get brands to get behind. So that’s a third vertical that were very strong, and we over 30 million people in that area. And won’t make an announcement, but we’re going to be aggressive growing that area as not a news alternative but a safe place for brands.


And then you’re going to see us roll out in the future; traveling, autos and parenting and entertainment. And you know, in the end, we want to build a next generation Yahoo, right? Reaching all humans in a very safe environment with great journalism, but a single database and a single platform where advertisers can just pull up and say we want 25 to 36 mother expecting women. Okay, great, we got 3 million. We want truck intenders in a sports and finance environment. Great, 6.8 million.


So we’re very accustomed to working at a multi-billion dollar advertising scale. You know, we’ve got leaders who’ve built accurate from Omnicom and senior leaders at up Nexus and Yahoo and Bright Media. And so we think we have a great group of people who are pioneers in the industry in advertising. And if you’re an ad agency, you just want things to be easy and safe and high scale. We can do the work. You know, sometimes I’ll compare it to Saudi Arabia.

If someone wants to pull up and buy sweet crude with the lowest friction possible. Buying shale oil in Alberta takes a lot of work, right? So for agencies to get margins, now that they’ve consolidated, you’re talking about a 3 to 6% margin. Back in the 80s, they had a 15% margin. It’s super easy for them. And now they’ve got all these data issues and safety issues and is above the fold, and did the video complete. It’s gotten so smart that it’s very difficult for them to survive. When they work with us, everything’s easy, 100% safe, no fraud, low ad load. We’re transparent for their ad servers to look at who they’re reaching, you know, their iOS issues.

But the main thing is that high scale quality premium and senior engineers from places like Google that they’re interacting with, they can make a margin with us.


BALDACHIN: Agencies can?


HECKMAN:  The ad agencies can.


BALDACHIN: So you’re working with agencies? You’re not trying to get rid of them? You’re not trying to go necessarily direct and squeeze them out?


HECKMAN:  Yeah, no, I mean, I think that’s a concern for them.


BALDACHIN: All of them?


HECKMAN:  Yeah. So all the stakeholders win with Maven. Consumers, when they come into an environment like Amazon for commerce, hundred percent of the content’s premium, professional, easy navigation fast download, so they win. The agency’s win because it’s inexpensive, safe, and we work with them. We’re very friendly to the agencies. Investors win, because as we grow, we don’t have to increase operating expenses material because it’s a single platform. So they know that in a world where media companies are collapsing, we’re actually benefiting by the media companies challenges and technology so we can help the media companies benefit. Journalists now have a sustainable opportunity to make a living. And so if we can stay in our lane, and not try to be a social network, not try to be all things to all people. We’re not a platform where journalists can just show up and use it like Medium or Twitter or YouTube. We’re very careful. We hand select professionals. And it’s a long process, because we don’t want any one journalist to bring down the network.


BALDACHIN: Let me rewind back to when Maven was started. This vision that you just articulated; a single platform, curating audiences in categories, the next generation Yahoo, that was the vision back in 2017 when you really started self-funding this thing?




BALDACHIN: You guys made the decision not to take venture at the time and to reverse merge into a public shelf. Can you talk a little bit about that decision, and how that’s played out, the ups and downs to that over the past two or three years? I mean, it’s paying off now. What went into that? What was your thought process?


HECKMAN:  So first of all, everything we do is contrarian. So we give up control to journalists, we want them to have control of their audience and data that scares people. You know, we don’t want a platform where anybody can use it. That would scare the venture capitalists because they’re worried about scale. You know, we’re a contrarian in that way. And we’re a contrarian, also on our capital structure. And I learned at a very young age, we took money from SoftBank, like 50 million or something like that. The liquidation preferences alone on that were triple. And so I remember getting an inbound from a major media company to buy my company for $100 million, and couldn’t sell it to them. That didn’t include Intel’s investment or News Corp.


BALDACHIN: Did you try and talk SoftBank out of their 3x at that time?


HECKMAN:  The market was just falling apart. But we could have gotten out if we didn’t have debilitating preferences. And by the way, they weren’t doing anything wrong. They were doing what everybody’s doing.


BALDACHIN: That’s what they negotiate. That’s what [inaudible 31:09] and you’re right that back then the multiple liquidation preferences were a thing. But you know, you don’t see it now. You wouldn’t see it now, but back then it was the case.


HECKMAN:  I mean, I don’t know that that’s true. You know, App Nexus sold for 1.7 billion and less than five people at the company made money because the preferences. I mean, venture capital has a thing where they get their money out first. Typically, at least 1x before participating. And I don’t appreciate the benefits, right. I think for every Snapchat and Facebook that you read, there’s Zyngas, right? So the employees who build the company, they sit behind the preference, the venture gets out with Goldman Sachs at the opening, and then all the employees are locked up and maybe they get out but you’re talking about a four or five year process minimum, and then all the hunks have taken out all the good stuff. And then obviously the investment bank comes in and takes their big chunk because they need to arbitrage the event. So they you know, in the mezzanine allow all their clients to get in and further dilute the company and then they get out two months later. It’s the regular way. It’s sexy to say, “Hey, we took you know, top tier VC and then got public.”


The reality is the great engineer who created that product, they typically don’t make any of them and you know, their stock the bus. Yeah, it’s just terrible. So listen, we looked at it differently. You know, we had a company, Five to One that we sold the Yahoo for $30 million, and that would be a loss, that’d be a devastating blow. All our top people made a lot of money; went and bought new houses, right, because we believe in common stock, no preferences. And we’d get laughed out of Silicon Valley offices. So what I just took it out of my balance sheet, funded the company to get going, and protected our employees. That’s what’s number one. I mean, the people who build the company are the ones that need to be first on the list.


And we found a great investment partner in B. Riley and of course, they worked very hard to understand our business, they’re very involved. And if you can find a good boutique investment bank to get behind you, and if you have good people, and you’ve got a good product. An investment bank’s not going to give you money unless you have a product that’s going to make money, right. I mean, the advantage of venture capital is they’ll literally let you lose money for five years for a big vision. And without them, we wouldn’t have the Googles and Amazons. I mean, Amazon lost money for you know, whatever. 20 years, right? And so, I’m not saying there’s not a place they go for crazy grand slams, and one out of 1000 is a grand slam, and they’re so big that their investors make money. And then the ones that don’t make it, they sell to their friends at a x Aqua hire, and they get a lot of their cash back.




HECKMAN:  That’s great model for them. But listen, we believe in building a company that’s profitable. We believe we’ll have a profit profitable company borrowing some unforeknown circumstance, but we’re on track to do that. And we launched our network two years ago. That’s unheard of, to have a nine-figure business that’s successful. But our banking partner, our goal is that everybody has the same preference that everybody has a chance to build equity to be own a beautiful home and see the benefits for their brilliant hard work.


BALDACHIN: What were some of the challenges early on prior to kind of getting…? So now you’re a public company, putting aside, you know, reporting obligations and other things. Were you able to tap the public markets? What was that first year like in terms of raising money and surviving?


HECKMAN:  I wouldn’t recommend for a 25-year-old executive to try to do something like this. I mean, we have a veteran crew and a great CFO, and have navigated all kinds of things, because not only are we doing this, we’ve done some acquisitions to bring in some great technology platforms so we can cover end to end for publishers. And we didn’t actually buy SI, we bought 100-year license for Sports Illustrated. And that wasn’t free, and The Street wasn’t free. And to do that, the nice thing about the public market is investors are willing to do pipes.

And so what ended up happening is we’ve got, instead of being on a road show for six months like you are sometimes with venture capital, it’s just debilitating going into these funds. Our investment bank partner B. Riley, their trusted with these small cap company investors and raising money where they know they’re going to have a liquidity event are much higher likely, they strike quick. So to be honest with you, way easier to raise money within this capital structure than raising private money from venture capital or private equity.


BALDACHIN: So B. Riley basically help market those pipes early on. They were involved that early.


HECKMAN:  Totally.


BALDACHIN: They’re trusting.


HECKMAN:  And they’re amazing. I mean, you should, you know, that company…


BALDACHIN: Well, I’ve gotten to know them a little bit, but obviously they’ve done a great job with Maven.


HECKMAN:  Yeah. Now, have we not performed — they’re probably are real tough people.


BALDACHIN: Maybe. Well, hopefully you won’t find out. Speaking of acquisitions. rewinding prior to The Street and SI you guys acquired, Say Media and you acquired HubPages. Talk a little bit about each of those acquisitions and why they were strategic at the time and what they brought to the table in terms of your platform.


HECKMAN:  Yeah, the days of having a WordPress site and going into an open auction and having a sustainable business are over. 80% of traffic, certainly news traffic is through the phone and 10 to 12 platforms for Android and iOS, and all the things we talked about earlier. And so I think being able to integrate and survive within a Google world’s really important. And HubPages, now it’s been 12 years, building the technology and having the expertise to make sure that our journalists are read and found on Google. People don’t go to portals anymore. I mean, with few exceptions. They’re going to type “Mahomes highlights,” right? Eli Manning Retirement, right? And they’re going to trust that Google’s going to bring the best story. So we’re now very good at that.


HubPages brings us about 50 million users per month. And then the other 70 million, they work within a system that hub pages built for us, and that’s why we were able to add 10 million users on Sports Illustrated is because we really are publishing in a way that consumers can find us at the story level. So that was important. And then that was a great technical team with engineers from Berkeley and Stanford and Princeton and Tufts and the CEOs at Cal Poly computer scientists, ex Microsoft execs, and most of our senior people are engineers. I’m seeing media same thing.


Ben Trott, so one of the early pioneers in blogging, founded Six Apart and TypePad, if you remember that, and has been working on CMS systems since 2001 or so; a great engineer out of Santa Clara. And we picked up his team. We didn’t take their sales team and middle management. We did a classic Maven, which is…


BALDACHIN: Cherry pick.


HECKMAN:  Yeah. Right. So we had great engineers, great engineering, but just amazing. When we ended up buying Say, they had been working with biography, but the stability of our company and our engineering combined with theirs was so attractive that History Channel signed with us. And together, we did a great job. But what we noticed is that in 30 days, Say Media’s technology actually can go and grab every story and video ever produced from History Channel, and move it over and republish it in our platform, and in a great way that we didn’t lose any kind of SEO power. And in fact, traffic went up.


And before we acquired Say, when we were moving people over to our system, we were literally going overseas and having them cut and paste. And I mean, it was really difficult. So they have great technology to ingest major media. And instead of traffic going down, it immediately goes up. And then when you add Maven’s community platform, some of what we do in video and with apps, our ad platforms extraordinary, and then you add certainly the hub pages technology, which is great for people discovering content. There are so many layers of technology. You got to 20 years system out of Ben Trott’s team. You’ve got 12 years from HubPages. Our team has been working together for you know, 20, 25 years. So you really have a platform where we can come right in and you know, almost like magic, they’ve gone from old technology portal level to having Facebook, Twitter-like technology and proficiencies from distribution, technical publishing and advertising.


BALDACHIN: So let’s talk a little bit about the SI deal, which was pretty unique in the sense that, as you mentioned earlier, it’s a license, and that was fairly well covered in the media. How did that come about? Sports Illustrated, the assets were acquired by Authentic Brands Group. Jamie Salters, company out of Toronto and New York. Talk through a little bit, the thought process of saying we’re not going to own this. We don’t need to own this. We’re going to license it. We have what we need. I mean, just maybe give a little bit of that background.


HECKMAN:  Yeah, I think some people have confused…Even though we did acquire the street, the first thing we did is cut a deal Jim Cramer so he could own his content. So we’re very contrary and we don’t want to own content, okay? We want to create such great service and such an ecosystem of power. So that independent media companies and journalists can be owners. This is the opposite, right?


BALDACHIN: Is it an effect in that and typography there? The idea is basically saying you’re the entrepreneur writer, you’re going to do what your…You don’t work for us in effect?


HECKMAN:  I mean, it’s the opposite of Fox. And I know that they’ve got a platform that they’re distributing, and they’re great company and Jim van Gogh’ss a very successful executive and I’m sure they’re going to be really successful. But my feeling is, is that owning technology, distribution and advertising and having to build a massive content library is so capital intensive, that the day that you can actually say you’re generating cash, maybe never.


And so what we’ve done is we’ve said, “Hey Jim, run your own thing.” And then we’re also seeking great financial journalists. So internally, we may have some rock stars kind of like well, we have at Sports illustrated right now. But really what it is we want those rock stars to help amplify great team writers, right.? And so when we looked at SI, I don’t think another company ABG bought them would want to come in and commit the resources that we have in SI with ABG owning the brand.


But we’re the right partner for them because we don’t mind. What we want to do is operate distribution, advertising and tech platform and let great journalists build a business for themselves. And we have some protections, in that we’ve got 100-year license; and our option every 10 years, we can extend as long as we do certain things like pay our bill. But for the most part, I mean, we’ve already…I think, we’re getting very close to already beating our minimum requirement to renew 10 years from now. We’ve grown the business so fast.


So anyway, the thought process in the story was pretty interesting. We were bidding on it. We had put a bid as high as 100 million dollars. And we’re trying to find out who our competition was. And when it got back to us that it was ABG, backed by Linda Green and Black Rock and General Atlantic, the last thing you want to do is—it’s like the Germans fighting the Americans, you’re just going to lose a war of attrition. It’s not going to work, right.


And so we started doing research and our biggest investor, Bryant Riley, who’s the CEO and founder of B. Riley said, “Hey, this is a beast of a company and somebody would like to do business with.” And so that was attractive. I mean, it’s actually you know, a great thing to have a partner like that. I think we do what they don’t. And so I thought, hey, well maybe we can operate the business just like they do with Muhammad Ali and Juicy Couture and Hickey Freeman and spider, you know, the own the brand, but they find the best in class to run it. And you know, we’re very proud that were chosen. We’re so aggressive that we’re scaring the hell out of everybody. We don’t wait a year to see how things are going and meet people and kind of think about someday you know, doing efficiencies. Within 10 minutes, we were cutting.


BALDACHIN: Well, one of the first things you did was get rid of the weekly, and I guess by that it was bi-weekly magazine, but you guys completely turn that upside down. And I guess today, I believe you can correct me if I’m wrong, the first issue of the newly reformatted, rethought SI Magazine hits newsstands. We will get a slide of that and put it up in the edit, but that’s exciting. And that’s I mean, maybe talk a little bit about what you did in the print side. And then actually, I’d be interested to hear what you think about print. So maybe that’s a nice way to go. Look you may have made the decision to cut out print entirely, that may or may not have been okay with ABG. But you’re really trying to take advantage of print.


HECKMAN:  We love print. That’s where we started our careers, and I have a great love for books. I have a book collection at home. But print is out of the news business. By definition, by the time you have to print something, it’s not even news. And so they were incrementally cutting, but they still had a news room for print. It was just ludicrous. You know, so two weeks later reading that Tiger Woods won the Masters. It’s just so silly.


So I think by coming in new, we were able to make decisions that they had to know where the right Decisions right. Trying to cover local from New York. I got a lot of controversy for controversy for that. But nobody with the brain believes that somebody with no relationship with the coach and the players should be doing daily news coverage of the Dallas Cowboys sitting in New York. It’s just stupid. So a lot of the stuff that was there, we just did it boldly. We came in on day one and did all the changes. You know, everybody’s going to hate you. You know, layoffs, changes new jobs.


BALDACHIN: [Inaudible 47:30]


HECKMAN:  Yeah, right. But look, we pride ourselves in not wasting our investor’s money; I want every dime to go to the future. And look, if we’re a charitable organization, then maybe we wouldn’t have made these decisions. But I don’t think the journalists want to be read by five people, just you know, doesn’t make sense. So, we were very aggressive.


BALDACHIN: Four of whom are and doctors and dentists’ offices.


HECKMAN:  Right. So I think these are great journalists. We want them to be read by 100 million people, not 1 million. We want them to make a good living. We want these journalists to be part owner of the company. We want them to get stock that’s common of a public company, not stock that’s never going to make them any money. We want them to help local journalists, when a local story becomes national, kick in that national, great talent that they have at Sports Illustrated, and be part of a great Dallas Cowboy story, but you can’t cover the Dallas Cowboys every hour because those aren’t national stories.


So we think we have a good plan. We believe in it. We executed immediately. We’re going to aggressively pursue it. We’re doing the same exact plan for the Street. Specific sights on specific sectors, curated at the national level if it’s national story with a great leader, like, great brand like Cramer, and I’ve got a great brand like Sports Illustrated. We’ve got other great brands. And we’re going to be building networks on a single platform going forward.


BALDACHIN: How do you evaluate what you want the print to do for you?


HECKMAN:  Oh, yeah. Well, listen, I think it’s just beautiful. And they’ve been a great photo team and great journalists. And so if you pick up the magazine, and you should, it’s something that’s timeless. So the physical thing is timeless. And it’s very simple. Don’t write anything that’s not timeless, right? It can’t be time sensitive, it can’t be irrelevant in two weeks. Again, these are things that it doesn’t take a brain surgeon to figure out but it’s just big companies are afraid to make bold moves, right? So all we’ve done is monthly, better paper, better quality, bigger, and everything written in there. 10 years from now, if you read, it’s going to be special.


BALDACHIN: So it’s really a disruptive approach to the media business. So you see some of these big behemoths struggling like Hearst, Conde Nast, very few media. I mean, you mentioned Vox, which has had its struggles BuzzFeed, obviously. Let’s say for example, hypothetically, you were recruited and you stepped in, you were the president of Hearst magazines. What would you do? Whether it be hers, whether it be Conde Nast? Why do you think they’re struggling so much? Is it just the classic difficulty of turning a titanic around? Is it cultural? Is it just, they just can’t get on top of their costs? Why can’t these guys kind of adapt, do you think? Why are they struggling to adapt? I don’t want to be so categorical, but…


HECKMAN:  No, for sure. First of all, I think Conde Nast is a well-run company. I think Hearst is a well- run company. And they’ve got some incredible investments in technology. And if you look at Conde Nast’s portfolio, you’d be surprised at some of the great companies that they have within their system. City Business Journals is local, they’re doing a nice job on their local digital in the way that they approach sales. I think they’re in and out of Reddit, which is I think really visionary. I think these guys have built a tech platform to help all their titles that’s single platform and I think they’d be better off using ours, but they’ve got the right idea.

So I think any of the struggles…Now, I’m specifically talking about Hearst and Conde Nast; you bring them up because they’re big companies. You know, Trey Young is over there. He was actually co-founder of Say Media, which we bought. So they’re picking


BALDACHIN: I had him as a guest on the show. Prior guests on the show.


HECKMAN:  Yeah, he’s great.


BALDACHIN: So I frankly think they’re making the right moves. You can’t make the entire company move in dime. That’s impossible. They’ve got their money and a lot of great places. They’ve got a good tech platform over at Hearst. And I think that struggles are, if you had two 20,000, Albert Einstein’s, there’s going to be pain going from being the most dominant print company to pivot to digital. There’s no way for them to not suffer pain and changes, they can’t see the exact future. It’s really easy for me to sit in this table starting from zero. We’re going to make all the right moves and you know, we’ve got no link to the past. And we had no emotional attachment to making decisions at SI. In fact, we wanted to do it quickly before we got emotional, right. So we’ve got that luxury. So I think those two companies…


I think there’s been other print companies— won’t mention their name—who probably had bigger challenges, their technology is not strong. I think that their DNA just never broke from print, and that everybody wants to. It’s not that people don’t know that the future is here. But the problem with a big public company is you have to hit quarterly numbers. So do you have the cojones to say we’re going to cut out you know, $300 million revenue because we think that this other thing that we’re going to do is going to replace that? Really hard to do as a head of a public company. And then you get stuff like well, he moved too hard too fast and…


BALDACHIN: [Inaudible 53:15]




BALDACHIN: And they got massive morale issues. Any of these companies because you got layoffs because you have declining revenue, very, very intractable situation.


HECKMAN:  And they’re smart people, but boy, it’s a really…


BALDACHIN: 100% guy. I mean, he’s really… I mean, that’s how he’s coming at it. What about some of the sort of the tastemakers, the pop sugars, the bustles, they’ve struggled as well. That’s digitally native media with multiple brands. Would the diagnosis there be again, this is all top down. This is you’re trying to through technology and media, with those guys if you had to kind of assess those competitors?


HECKMAN:  All of the people that you mentioned and BuzzFeed have done have been extra extraordinary pioneers. And I would say it’s hard to judge people who have turned the needle, and if things have gotten challenging because the world has changed, and they weren’t able to pivot, it’s like criticizing somebody for inventing the me 262 jet aircraft. It’s not a raptor now, and but they did invent the first operational military jet. And Pop Sugar really did some cool stuff, right. And I’m not saying that it’s still not a great brand. BuzzFeed came out early and figured out what was going on before the free content game was shut off. Right? I mean, eventually if you’re relying on somebody else




HECKMAN:  Yeah, right. If you’re relying on third party monopoly for all your traffic, I think it’s a big challenge. And you know, I think clickbait, link bait, heavy ad load, listicles. All these things were tricks that don’t… I’m not saying that any of the companies I just mentioned, did any of these things. But usually when I look at a really clever engineer who’s got a new idea and say, “Look, what I’ve been able to do. You know, I do this and turn this dial, and I’m able to arbitrage blah, blah, blah.” They all are temporary tricks. And I’d say the one thing that’s different about Maven, and the reason why I think somebody might say, “Well, gee, you get a lot of traffic from Google.” It’s not a trick, right? They’re not clickbait headlines using other people’s content and a robot. We work with great journalists.


10 years ago, Google was not that sophisticated in terms of content. Today, they scan the page and make sure that you didn’t copy the content elsewhere, that it’s not basically aggregation and arbitrage. So Google rewards authenticity and professionalism and quality journalism, they actually evaluate what the domain name is to see if it’s actually a real journalist company, you know, not a bot from Russia. And so, I think there’s a lot of people out there that were doing clever tricks to make money. They had people in rooms coming up with headlines and testing headlines doing the same content eight times. Like, all those things I…


BALDACHIN: Farming, basically.


HECKMAN:  Yeah. We don’t do that. What we do is we do the obvious headline, right, the player name, the team name, and have great content. So what’s wrong with that?


BALDACHIN: That sounds good. Speaking of sounding good, let me end on this note, one of the perks obviously of now being involved in SI, operating SI is things like the Superbowl. What do you guys have planned for the Superbowl at SI? And who do you like between the Chiefs and the 49-ers? And that’s probably a loaded question given you’re a West Coast guy.


HECKMAN:  My kids don’t like the 49ers because they become a…


BALDACHIN: A Seahawk fan?


HECKMAN:  Because they become a Seahawk rival. I’m going to be traveling with somebody, some people who are big 49ers fans, and I really think that the Super Bowl comes down to the quarterback. Eight times out of 10 and Mahomes is just unstoppable. You can’t feel about it. You can’t do a game plan against them and get a great deal.


BALDACHIN: I lost two weeks in a row. I bet the Underdog two weeks ago and got killed.


HECKMAN:  You did? Yep. So I mean, I would probably bet on Mahomes you know, if you had to put your money.


BALDACHIN: I don’t know what the line is. Not that this is a betting show.


HECKMAN:  Yeah, I don’t know.


BALDACHIN: We’ll have to check that out after.


HECKMAN:  The Super Bowl’s the biggest corporate event in the world. And the timing…


BALDACHIN: It matters.


HECKMAN:  It matters. And the timing couldn’t be better for us. You know, our great partners at ABG are partnering to do an amazing Super Bowl party, Black Eyed peas are playing and, and a bunch of young, great artists that I’ve never heard of are going to be there but everybody else has heard of. I’m not good at music.


BALDACHIN: It sucks when that happens.


HECKMAN:  Right. But yeah, everyone in the ad industry is aware of Maven. That’s just a fact. We’re coming in. We’re very big and premium and great technology and coming out of nowhere. And so the Super Bowl’s here, and we’re going to be doing business down there. And it’s a great hospitality opportunity, but one that is in line perfectly with Sports Illustrated. On the cover, we have every Miami Super Bowl MVP on the cover that’s still alive. And you know from Joe Namath to John Elway. There are going to be great players down there that we’re going to provide access for clients. And we do believe that if all the advertiser’s in one place, we think that investing and building those relationships so they understand what we’re about, that’s a good expenditure of shareholder money. It accelerates growth of revenue. I think some short-sighted people will say, “Well, gee, why are you spending money on hospitality?” It’s not about taking care of people who are decision makers because everybody’s doing that. But if you’ve got a product that’s going to help them be more successful, then you definitely need to take advantage of the times when all in one place, right? And if you don’t make it a place where people want to hang out, you’re not going to have that conversation.


And so going back to My Space to Yahoo, everything we’ve we’re doing, we believe in ad agencies, we think there’s a place for them. We think they’re totally focused on brand building, taking all things into consideration. And if you give them a budget, they’re going to think about efficiencies and they want to keep their job. I mean, I think it’s a great part of the ecosystem. And so they’re very tough because their clients are tough on them, right? And so we want to show up and say, “Hey, look, great value, great efficiency, safety, brand uplift, the disciplines that we have on our business is good for the agency business,” and the agency business wants to do a great job for their clients.


And so yeah, we’re going to be down there working. And like I said, the timing couldn’t be better for the launch of company.


BALDACHIN: That sounds great. That’s really fun. That’s really exciting. And James, thanks for coming in and sharing the story with us.


HECKMAN:  Awesome, great.


OUTRO: That’s a wrap on this episode of The Medium Rules with Alan Baldachin. For more information, go to our And you can also follow us on Instagram, Twitter and Facebook. And don’t forget to rate us on Apple Podcast.