The company that took control of Sports Illustrated just raised $20 million after 'substantial doubts' that it would continue as a going concern



  • Maven, the startup that just took over Sports Illustrated’s operation, was showing substantial losses last year.
  • Management expressed “substantial doubt” that the company could continue through 2019, according to an SEC filing from August.
  • The company just raised another $20 million from hedge funds and insiders to help fund operations.
  • CEO Jim Heckman says that he foresees the company being profitable in 2020.
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Maven, the startup founded in 2017 by Jim Heckman as an independent publisher platform, was sustaining heavy losses as of last year, according to a quarterly SEC filing.

As of July 2019, the company had raised about $112.8 million, but still didn’t have enough resources to fund its operation through June of 2020, according to the filing.

Serial entrepreneur Heckman founded Maven in 2017 as a platform to help independent publishers compete in a Facebook- and Google-dominated digital ad market. Maven is in the spotlight now having recently licensed the right to operate Sports Illustrated from ABG, a branding, marketing and entertainment company that bought the title from Meredith Corp. SI laid off employees and Maven announced plans to use contractors to help feed the site, prompting employees to beg Meredith and ABG to drop Maven and “save SI.”

Heckman’s past business practices have also been the subject of scrutiny by NPR.

Read more: How Jim Heckman — the slick businessman behind the mass layoffs at Sports Illustrated — became the most hated man in sports media
As of June 30, 2018, Maven had cash of $116,187, losses of $8.7 million, and a deficit of $17.2 million.

“As a result, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern” through 2019, the filing said. Those doubts were echoed by the company’s independent accountant.

In June 2018, Heckman himself put $1 million of his own money into the company to keep it running.

Fast forward to today, Heckman says he expects Maven to be profitable in 2020. Maven just raised another $20 million through an investment firm called B Riley Financial that financed Maven’s deals for TheStreet and Sports Illustrated. About half of the money was raised from 10 directors and/or executives at Maven, including Heckman. 

Of course, it’s common for startups to lose money, and as a public company, Maven’s finances are subject to public scrutiny.

Heckman has history of using same backers, execs, business model

Maven also has been on an acquisition tear. It acquired publisher tech platform Say Media for $20 million in cash, stock and debt, and combined it with HubPages, a collection of niche content sites, last year. In 2019 Maven acquired TheStreet for $16.5 million and paid $45 million to ABG for three years of licensing fees for Sports Illustrated, according to financial filings.

Earlier, Maven was backed by MDB Capital, an investment bank that has been described as known for backing early-stage companies that have no revenue and pitched itself as an alternative to venture capital, according to The Business Journals. Some critics have suggested that MDB has a “history of underwriting tantalizing stories that don’t materialize,” per the report. CEO Chris Marlett was a director of Maven. 

MDB and Heckman have a long history. It helped him start Scout Media in 2001, a network of sports sites; and 5to1 in 2009, an ad tech company. 5to1 later sold to Yahoo and Scout sold to Fox Interactive. Heckman bought back Scout from Fox in 2013 and it went bankrupt three years later.

Yet despite these troubles, Maven, in a filing, says it’s following the playbook its founders followed at 5to1, Scout, and, which started in 1998 and like many others at the time, collapsed in the dot-com bust.

The filing showed other weaknesses and irregularities in the company’s operations. Its former accounting firm, BDO, which has since resigned, found Maven lacked effective controls and procedures and accounting resources as it expanded its operation through complicated financing transactions. As a result, the company fell behind on filing required financial reports on time in 2018 and 2019, per the filing.

The company also incurred penalties for failing to meet certain public information disclosure requirements and registration rights penalties.

In the filing, Maven said it’s begun addressing the issues that the accountants raised.

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