Trims Staff of Sports Illustrated's Publish; Future in Limbo
The Arena Group, publisher of SI, recently failed to make a $3.75 million payment to SI’s license holder, Authentic, leading to the termination of their deal. On Friday, Arena initiated layoffs at Sports Illustrated, notifying staff of significant job cuts, some immediate and others in the near future, with the potential for the entire staff to be gone in three months.
Authentic, which acquired Sports Illustrated for $110 million five years ago, has terminated its agreement with The Arena Group to publish SI in print and digital. This decision follows Arena's failure to make the $3.75 million payment, breaching the licensing deal that began in 2019. Authentic's termination triggered an immediate $45 million fee, according to an SEC filing on Friday.
In response, Arena informed SI employees via email that Authentic Brands Group (ABG) officially revoked the license, necessitating staff layoffs. Severed guild members will receive a 90-day notice, with a chance of resolution during this period. Non-guild employees, however, will be laid off immediately. Confusion persisted about the extent of layoffs, but a 2 p.m. staff call clarified that those remaining after 90 days would be laid off unless the licensing issue was resolved.
Arena's email to staffers explained that some employees would be terminated immediately, while others would work through the notice period. The Sports Illustrated Guild, in a statement on X, emphasized their ongoing fight to uphold the publication's standards and fair treatment of workers.
Authentic terminating Arena's license and Arena cutting SI's staff indicate a shift, occurring weeks after Manoj Bhargava, founder of 5-Hour Energy, assumed leadership at Arena. Authentic has explored options to replace Arena's role with SI, signaling a commitment to a swift process, possibly involving renegotiation or a new operator. Authentic, in a statement, affirmed its dedication to preserving Sports Illustrated's legacy.
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