The Business Behind the SI Swimsuit Issue

The Sports Illustrated Swimsuit issue is a multi-million-dollar secret kept under wraps each year until it hits newsstands. Everything from the cover model to the exotic locales of the shoots to even the names of the women that grace its pages, remains top secret.

And when it's finally revealed, it's a global sensation. In fact, it has grown into a multimedia franchise that, since its debut in 1964, has made more than $1 billion for parent company Time Inc. Even in today's tough economy, it continues to print its own profits.

Here we look at some of the lesser-known facts behind one of the best selling magazine issues of all time.

In 1963, then-Managing Editor Andre Laguerre was looking for a cover that would make the magazine noticeable during the winter months when football had ended and baseball had yet to begin. He asked his editors to send him memos with good ideas, and that's just what he got from Fred Smith: put a pretty girl on the cover in a resort that relates to sport. The first cover hit newsstands in January, 1964, as a five-page supplement.

All three editors of the Swimsuit issue have been women, including current editor Diane Smith. The original Swimsuit editor Jule Campbell, pictured, created every issue from 1965 to 1996.

"The crews were very spare in the early days," Campbell says. "It was the photographer and me, and five cameras around my neck."

The Swimsuit issue alone generates 7 percent of advertising revenue for Sports Illustrated and is the single best-selling print issue in Time Inc.'s stable of magazines. On average, it sells more than one million copies at newsstands. (Pictured: The Heidi Klum cover)

It's not just advertisers and Sports Illustrated Group and Time that reap the benefits of the Swimsuit issue's popularity. When the Swimsuit issue first visited Chile in 2004, tourism rose 34 percent, according to Kristina Schreck of Chile's Board of Tourism.

"It's a phenomenal promotion for us, for the country as a whole," Schreck says. "You know, it's better than any ad we could buy."

There are roughly 25,000 swimsuits in the swimsuit closet each year for the editors to choose from. With an estimated 22 million female readers using the issue as a shopping guide each year, being featured in the issue can be a huge boon for designers.

Bikini designers and manufacturers aren't the only ones to get a boost from being featured in the Swimsuit issue. When jewelry designers' creations make the issue, their sales often take off, as was the case with Margaret Maggard's Bhati Beads, featured in the 2007 issue.

Since then, her designs have been inside three consecutive issues, and Maggard reports a 66 percent increase in sales after each issue hits newsstands.

The Swimsuit issue is a hot topic in the world of economic indicators. When the cover model is from the United States, the S&P is supposed to show a return for the year above it’s historical rate. With a non-American cover model, the S&P 500 will underperform.

From 1979 to 2008, the average return was 8.87 percent. When the cover model was American, the average return was 13.9 percent, but just 7.2 percent when non-Americans made the cover.

In 1988, supermodel Elle Macpherson from Australia was on the cover, and obviously an outlier. The S&P averaged 11.7 percent that year.

Unlike the markets, model salaries for the Swimsuit issue have varied little over the years. Most models before 1996 made just $250 a day or less. But the boost it gives to most models' careers makes the shoots incredibly appealing, especially for younger models. (Pictured: Carol Alt)

The issue's ability to launch models' careers really occurred when then-editor Jule Campbell pushed for models to be named on the cover — just like sports stars. The revolutionary move made superstars out of models like Cheryl Tiegs (pictured) and allowed Campbell to keep their day rates low. For this shoot, Tiegs made just $125.

Swimsuit issue photographers snap roughly 155,000 photos each year. It takes a staff of six to sift through them to find the photos that are just right for the issue.

Sports Illustrated Group President Terry McDonell has a mandate for the 2010 Swimsuit issue:  Smiles!  Fake, sexy or leering looks can be unappealing or lewd, but, according to McDonell, no one can argue with a photo of a smiling, beautiful model. You won't see any dour or pouty models in the 2010 issue!