The future of Sports Illustrated is up in the air as The Arena Group laid off a portion of its staff on Friday, with the rest expected to be let go in three months’ time, according to Front Office Sports.
Authentic, the licensing group that originally purchased SI for $110 million five years ago, is terminating its licensing agreement with The Arena Group. According to Front Office Sports, Arena Group missed a $3.75 million payment to Authentic three weeks ago, breaching the 10-year Sports Illustrated licensing deal. That notice of termination also triggered an additional $45 million fee for Arena to pay immediately to Authentic, according to an SEC filing from Thursday.
Arena Group notified all staff members of their termination via email.
“… We were notified by Authentic Brands Group (ABG) that the license under which the Arena Group operates the Sports Illustrated (SI) brand and SI-related properties has been officially revoked by ABG,” Arena wrote in an email to Sports Illustrated employees. “As a result of this license revocation, we will be laying off staff that work on the SI brand.”
According to SI union sources who spoke to Front Office Sports, some staffers were immediately let go while others were given a 90-day notice. Despite a three-month window to resolve the licensing issue between Authentic and Arena, staffers were told in a call Friday afternoon that anyone remaining after the 90 days would be laid off.
“Some employees will be terminated immediately, and paid in lieu of the applicable notice period under the [the union contract],” Arena’s email read, per Front Office Sports. “Employees with a last working day of today will be contacted by the People team soon. Other employees will be expected to work through the end of the notice period, and will receive additional information shortly.”
“This is another difficult day in what has been a difficult four years for Sports Illustrated under Arena Group (previously The Maven) stewardship,” SI Union Chair and SI NFL editor Mitch Goldich wrote in a statement following the news. “We are calling on ABG [Authentic Brands Group] to ensure the continued publication of SI and allow it to serve our audience in the way it has for nearly 70 years.”
“We expect The Arena Group to honor all terms of our union contract and will fight for every one of our colleagues to be treated fairly.”
Authentic released a statement to FOS, stating that it would “ensure that the brand of Sports Illustrated, which includes its editorial arm, continues to thrive as it has for the past nearly 70 years.”
An Arena spokesperson did not respond to Front Office Sports when contacted about the details of the layoff plans.
“We are in active discussions with Authentic Brands Group – but we understand we aren’t the only ones,” The Arena Group said in a statement. “Even though the publishing license has been revoked we will continue to produce Sports Illustrated until this is resolved.
“We hope to be the company to take SI forward but if not, we are confident that someone will. If it is another business, we will support with the transition so the legacy of Sports Illustrated doesn’t suffer.”
The day before, Arena Group laid off 100 employees In addition to Sports Illustrated, the Arena Group owns and operates more than 20 different publications, including Men’s Journal, Parade, and TheStreet.
SI was sold to Meredith Corporation as part of an acquisition of Time Inc. in 2018. The company sold off Sports Illustrated to Authentic Brand Groups for $110 million the following year. Licensing out the rights out to theMaven (later called The Arena Group), Sports Illustrated’s digital identity became a hub for other smaller sites like Athlon Sports, The Spun, Morning Read, and The Hockey News.
Back in November, Sports Illustrated was caught publishing AI-generated content under writers’ names that did not exist on its website. The company denied that the work was written by AI while acknowledging that a third party, AdVon Commerce, created content for their website under pseudonyms. That relationship was terminated immediately.
A month later, new leader and 5-Hour Energy founder Manoj Bhargava led a bizarre town hall meeting in December. In the 90-minute meeting, Bhargava told the SI staff “No one is important. I am not important. … The amount of useless stuff you guys do is staggering.” Bhargava was CEO of Arena Group from Dec. 11 to Jan. 5, stepping down after his Bridge Media Networks was negotiating “a substantial investment” in Arena.
Ed. note: We’ve updated the story as more details have emerged regarding the layoff situation.
