Startup Stories: Taking on a Life of Its Own
Ryan McNeil covered his last receiver as a Denver Bronco cornerback in 2004, retiring from professional football after an 11-year career. Leading up to his retirement, McNeil had been moonlighting as president and CEO of the Professional Business and Financial Network, a Web-based resource and networking community for professional athletes who are also budding entrepreneurs.
PBFN offered networking opportunities through the site and seminars and conferences, but McNeil felt a magazine would complete the picture. OT (short for Overtime) launched in mid-2004 and has since taken on a life of its own, moving beyond a member benefit to a profitable quarterly with slow but steady circulation growth.
If PBFN is all about helping pro athletes, not just football players, enter and succeed in business, then OT extends that mission and adds a lifestyle twist. The title, initially launched to a controlled circulation of 25,000, offers business, health, financial and luxury lifestyle coverage for (mostly male) professional athletes of any sporting persuasion, and also targets their agents, coaches, management and other pro-sport insiders with an average annual income of $1.5 million. OT fills an opportunity left vacant by Street & Smith's Pro, which shut down after four issues five years ago. McNeil, who is OT's publisher and editor-in-chief, says his combination of lifestyle with business coverage and a willingness to let the magazine slowly mature is a formula for success.
McNeil researched his market throughout 2003 under the guidance of George Gendren, Inc.'s editor-in-chief from 1983 to 2002. For McNeil, the challenge wasn't creating a compelling package as much as putting his reputation on the line. "As a cornerback I'm not afraid of too many things but this was one decision I was kind of afraid of because it's something you're putting into a space in which you're well respected and you're not sure how they will respond."
With between $250,000 and $500,000 of his own money, McNeil launched OT by going the custom publishing route;printing and production being, by far, the biggest chunk of his investment. "I wasn't a publisher at the time, I was an all-pro cornerback," says McNeil. "The smart money was to team up with someone in the space."
After several months researching partners, McNeil settled on Boston-based RMS Media Group, which handles design, production and ad sales.
At launch, McNeil's only other full-time employee was an executive editor. Stacy Small worked on the first three books and has since been replaced by Mark Write, who has previously written for ESPN.
With OT's launch, PBFN's membership shot up about 40 percent. Distribution is handled through partnerships with organizations such as the NFL Players Association. OT was profitable with its first issue. "Our first book was a hundred pages," says McNeil. "To me a good ratio is 60/40, but we started out at 70/30." From there the magazine went up to 116 pages, then 132, and is now at 154 and more in line with McNeil's original target ratio.
Going forward, McNeil is exhibiting what he thinks is key to the magazine's success, restraint. Plans initially called for a frequency change to bi-monthly in 2006. Instead, he's maintaining a quarterly frequency while growing circ and experimenting with a paid and controlled model. According to McNeil, delaying the frequency change will save him approximately 25 percent in production costs.
While professional athletes will never have to pay for the magazine, other pro sports insiders will;$29.95 offline, $19.95 through the Web site. McNeil hopes to double his circulation, which now stands at about 40,000, by the end of 2006, with 75 percent paid. OT plans to go bi-monthly in 2007 with a long-term goal of 9-times in 2008.
McNeil has begun approaching outside investors, but not to help fund the magazine. Declining to be specific, McNeil wants to launch spin-off products;events, Web sites and other print products.
According to McNeil, his biggest challenges launching OT were the uncertainty of knowing how customers would like the magazine and the decision to go controlled. "We look at this magazine as the perfect read for the sophisticated sports fan. I'm glad we didn't [start with paid circ] because we want to have a bit of exclusiveness to us. It's a nice market, it's a nice demo for advertisers."
||| TAKEAWAYS |||
Leverage Organic Growth
οΎ Despite OT's profitability after its first issue, McNeil has grown circ organically and opted to delay six-time frequency another year;saving him approximately 25 percent.
Leverage Built-In Connections
οΎ A former all-pro cornerback for the Denver Broncos, McNeil had a built-in distribution partner with the NFL Players Association. His status as a pro athlete also gave him access to similar organizations in other leagues.