The Arena Group Holdings Stock

The Arena Group Holdings, Inc. (Arena Group) is a tech-powered media company that focuses on building deep content verticals powered by a best-in-class digital media platform (the Platform) empowering premium publishers who impact, inform, educate, and entertain.

The company’s strategy is to focus on key verticals where audiences are passionate about a topic category (e.g., sports and finance), and where it can leverage the strength of its core brands to grow its audience and increase monetization both within its core brands, as well as its media publisher partners (each, a Publisher Partner). The company’s focus is on leveraging its Platform and iconic brands in targeted verticals to maximize audience reach, improve engagement, and optimize monetization of digital publishing assets for the benefit of its users, its advertiser clients, and its greater than 40 owned and operated properties, as well as properties it runs on behalf of independent Publisher Partners. The company operates the media businesses for Sports Illustrated (Sports Illustrated), own and operate TheStreet, Inc. (TheStreet) and College Spun Media Incorporated (The Spun), Parade Media (Parade), Men’s Journal and power more than 225 independent Publisher Partners, including the many sports team sites that comprise FanNation. Each Publisher Partner joins the Platform by invitation only and is drawn from premium media brands and independent publishing businesses with the objective of augmenting the company’s position in key verticals and optimizing the performance of the Publisher Partner. Publisher Partners incur the costs in content creation on their respective channels and receive a share of the revenue associated with their content. Because of the state-of-the-art technology and large scale of the Platform and the company’s expertise in search engine optimization, social media, ad monetization and subscription marketing, Publisher Partners continually benefit from its ongoing technological advances and bespoke audience development expertise.

The Platform

The company developed the Platform, a proprietary online publishing platform that provides its owned and operated media businesses, Publisher Partners (who are third parties producing and publishing content on their own domains), and individual creators contributing content to its owned and operated sites (Expert Contributors), the ability to produce and manage editorially focused content through tools and services provided by it. The company has also developed proprietary advertising technology, techniques and relationships that allow it, its Publisher Partners and Expert Contributors to monetize online, editorially focused content through various display and video advertisements and tools and services for driving a subscription or membership based business and other monetization services (the Monetization Solutions and, together with the Platform, the Platform Services). The company’s Platform offers audiences bespoke content with optimized design and page construction.

The Platform comprises state-of-the-art publishing tools, video platforms, social distribution channels, newsletter technology, machine learning content recommendations, notifications, and other technology that deliver a complete set of features to drive a digital media business in an entirely cloud-based suite of services. The company’s software engineering and product development teams are experienced at delivering these services at scale. The company continues to develop the Platform software by combining proprietary code with components from the open-source community, plus select commercial services, as well as identifying, acquiring, and integrating other platform technologies, where it sees unique long-term benefits to it.

The Platform Services include:

Content management, machine learning driven content recommendations, traffic redistribution, hosting and bandwidth;

Video publishing, hosting, and player solution via an integrated set of third-party providers;

Dashboards for the company’s Publisher Partners, as well as integration with leading analytics services like Google Analytics;

User account management;

User account migration to platform, including emails and membership data;

Technical support team to support its Publisher Partners and staff (if applicable) on the Platform;

Advertising serving, trafficking/insertion orders, yield management, and reporting and collection;

Various integrations to enable the syndication of content (e.g., Apple News, Facebook Instant Articles, Google AMP, Google news and RSS feeds); and

Other features, as they may be added to the Platform from time to time.

The company’s Publisher Partners use the Platform Services to produce, manage, host and monetize their content in accordance with the terms and conditions of partner agreements between each of its Publisher Partners and it (the Partner Agreements). The company’s Publisher Partners incur the costs with respect to creating their content; thus, not requiring capital expenditures by it. Pursuant to the Partner Agreements, the company and its Publisher Partners split revenue generated from the Platform Services used in connection with the Publisher Partner’s content based on certain criteria, such as whether the revenue was from direct or programmatic advertising sales, was generated by its Publisher Partner or the company, was generated in connection with a subscription or a membership, was generated from syndicating or licensing the content to third-parties, or whether the revenue was derived from affiliate links.

Subject to the terms and conditions of each Partner Agreement and in exchange for the Platform Services, the company’s Publisher Partners grant it, for so long as its Publisher Partner’s assets are hosted on the Platform, the right to use, host, store, cache, reproduce, publish, publicly display, distribute, transmit, modify, adapt and create derivative works of the content provided by the Publisher Partner to provide, maintain and improve the Platform Services; use, publicly display, distribute and transmit the name, logo, and trademarks of the Publisher Partner to identify them as users of the Platform Services; exclusive control of ads.txt with respect to its Publisher Partner’s domains and the exclusive right to include its Publisher Partner’s website domains and related URLs in its coalition in a consolidated listing assembled by third party measurement companies, such as comScore, Nielsen or other similar measuring services selected by it. As such, the Platform serves as the primary digital media and social platform with respect to each of its Publisher Partners’ website domains during the applicable term of each Partner Agreement.

Brands and Growth Strategy

The company’s business model is to grow its Platform audience while striving to diversify revenue and drive gross margin through traditional media brands as well as new digital-first brands. The company’s vertical model allows it and its partners to leverage audience growth, technological efficiencies and cost savings across all of its brands. The company’s vertical model consists of acquiring or partnering with powerful brands that can offer its audience bespoke content and domain authority; forming key strategic partnerships with like-minded partners of high-quality content; partnering with entrepreneurial publishers to drive local content at variable cost tied to performance; and growing its Publisher Partners on its network to expand its content offerings and add scale to the ecosystem.

The company’s growth strategy is to continue to expand the coalition by adding new Publisher Partners in key verticals that will expand the scale of unique users interacting on the Platform. In each vertical, the company seeks to build around a leading brand, such as Sports Illustrated (for sports), TheStreet (for finance) and Parade and Men’s Journal (for lifestyle), surround it with subcategory specialists, and further enhance coverage with individual Expert Contributors. The primary means of expansion is adding independent Publisher Partners or acquiring publishers that have premium branded content and can broaden the reach and impact of the Platform. Specifically, the company’s 2023 growth initiatives include increasing syndication of the content on its Platform through the re-publishing the content on third-party websites, offering of podcasts and e-commerce through its Platform, growing Sports Illustrated sportsbook (SI Sportsbook), acquiring or developing new verticals for its users, and continuing to identify and partner with new Publisher Partners.

Sports Illustrated

In 2019, the company entered into a licensing agreement, as amended (the Sports Illustrated Licensing Agreement) with ABG-SI LLC (ABG), pursuant to which it has the exclusive right and license in the United States, Canada, Mexico, United Kingdom, Republic of Ireland, Australia, and New Zealand to operate the Sports Illustrated media business (in the English and Spanish languages), including to operate the digital and print editions of Sports Illustrated (including all special interest issues and the swimsuit issue) and Sports Illustrated for Kids, develop new digital media channels under the Sports Illustrated brands, and operate certain related businesses, including without limitation, special interest publications, video channels, bookazines, and the licensing and/or syndication of certain products and content under the Sports Illustrated brand. ABG is a brand development, marketing, and entertainment company.

Since assuming management of the Sports Illustrated media assets in 2019, the company has implemented significant changes to rebuild the historic brand and beacon of sports journalism, to evolve and expand the business, and to position it for growth and continued success going forward.

With respect to Sports Illustrated Swim (SI Swim), the company has transitioned to a female-focused lifestyle brand, with the annual content release in May 2022. The company’s fan-facing event to celebrate the 2022 annual content release and ongoing digital sponsorships was held over several nights in May 2022 and it partnered with Hard Rock, Maybelline, Celsius, Frida Mom and others.

SI Sportsbook, an online sports betting app, was launched in 2021 in Colorado and has expanded to several states through the end of fiscal 2022. Pursuant to a licensing agreement, the company provides content for SI Sportsbook and its partner, 888 Holdings PLC, one of the world’s leading online betting and gaming companies, provides the gambling engine, which it makes available to users in certain states in which it is registered.

TheStreet

TheStreet is a leading financial news and information provider to investors and institutions worldwide and produces business news and market analysis for individual investors. TheStreet has a strong editorial tradition, robust subscription platform, and valuable membership base to it, and benefits from its mobile-friendly CMS, social, video, and monetization technology.

The Spun

The Spun is an online independent sports publication that brings readers the most interesting athletic stories of the day. The Spun focuses on the social media aspect of the industry.

Parade

The company acquired Parade, a premium-branded company in April 2022 which helped to expand its digital audience reach. Parade has become the anchor of the company’s new lifestyle vertical, and Athlon Sports, one of Parade’s premium-brands, has expanded its sports vertical. In the fourth quarter of 2022, it discontinued the Parade print business.

Men’s Journal

In 2022, the company acquired certain assets and liabilities from Weider Publications, LLC, a subsidiary of A360 Media, LLC (or Men’s Journal). This suite of digital assets provides the company’s audience with access to premium active lifestyle brands, including Men’s Journal, Men’s Fitness, Surfer, Powder, Bike, SKATEboarding, Snowboarder and NewSchoolers.

HubPages, Inc. (HubPages)

HubPages enhances the user’s experience by including content from individual creators to the HubPages network of premium content channels that are owned and operated by Arena. These channels, such as PetHelpful, dengarden and Fashionista, act as an open community for writers, explorers, knowledge seekers, and conversation starters to connect in an interactive and informative online space.

Intellectual Property

As of December 31, 2022, the company had 7 issued patents in the United States, all expiring by 2033.

As of December 31, 2022, the company also owned approximately 1,300 U.S. copyright registrations and had unregistered copyrights in its software documentation, software code, marketing materials, and website content that it develops, and owned over 1,600 registered domain names. As of December 31, 2022, the company also owned 165 U.S. trademark registrations, 15 pending U.S. trademark applications, and 88 issued foreign trademark registrations and 20 pending foreign trademark applications in over 30 countries, and a number of unregistered marks that it uses in the United States and other countries to promote its brands.

The company’s registered trademarks are all subject to renewal at various times through 2033.

Seasonality

The company experiences seasonality during the year (year ended December 31, 2022), as a result of advertising seasonality and sports seasons and major sporting events. Advertising typically peaks in the fourth quarter of the company’s fiscal year as advertisers concentrate their budgets during the holiday season. This trend is magnified as it also includes the professional sports and college football seasons, which account for a significant portion of its advertising revenue during that period of the year. Other sporting events, such as the Super Bowl, Winter and Summer Olympics, soccer’s World Cup, and major golf, tennis and cycling events create increased traffic surrounding the respective events.

Government Regulations

The company launched a CCPA (California Consumer Privacy Act of 2018) compliance program in January 2020 and has expedited it to cover the California Privacy Rights Act (the CPRA) as well. On an annual basis the company reviews the program and adjust its privacy notice and compliance program practices to account for its evolving practices and the CCPA/CPRA regulations, which were first promulgated in July 2020 and continues to be subject to ongoing rulemaking.

The Federal Trade Commission (FTC) regularly considers issues relating to online behavioral advertising (also known as interest-based advertising), which is a significant revenue source for the company, and Congress and state legislatures are frequently asked to regulate this type of advertising, including requiring consumers to provide express consent for tracking purposes, so that advertisers may know their interests and are, therefore, able to serve them more relevant, targeted ads.

History

The company was formerly known as TheMaven, Inc. and changed its name to The Arena Group Holdings, Inc. in February 2022.