Sports Illustrated's Publisher Announces Significant Staff Reductions, Future in Limbo

 

Sports Illustrated Staff Faces Layoffs Amid Licensing Agreement Termination

Staffers at Sports Illustrated received unsettling news on Friday as massive layoffs were announced—some immediate, others impending.

Authentic, the licensing group that acquired Sports Illustrated for $110 million from Meredith five years ago, has terminated its agreement with The Arena Group, responsible for publishing SI in print and digital. This move follows Arena's failure to make a $3.75 million payment three weeks ago, breaching their licensing deal that began in 2019. Authentic's termination triggered an immediate $45 million fee, according to an SEC filing on Friday.

The Arena Group, publisher of SI, recently missed a $3.75 million payment to SI’s license holder, Authentic, leading Authentic to sever the deal. On Friday, Arena started laying off employees.

According to an email from Arena to SI employees, layoffs will vary—some receiving immediate termination with payment in lieu of notice, and others expected to work through a notice period. The layoffs come after Authentic's move to terminate Arena’s license, following Arena's missed payment.

The Sports Illustrated Guild expressed solidarity on social media, stating, “We have fought together as a union to maintain the standard of this storied publication that we love, and to make sure our workers are treated fairly for the value they bring to this company. It is a fight we will continue.”

Authentic’s termination of Arena’s license and Arena’s layoffs signal a shift within the company. Since the founder of 5-Hour Energy, Manoj Bhargava, introduced himself as Arena's new leader, Authentic has explored options to potentially take over Arena’s role with SI.

Amidst financial struggles in the digital age, SI faced challenges, including a report that the website published AI-generated reviews without disclosure. Authentic's exploratory conversations with potential replacement operators began before Arena's missed payment.

In addition to the SI layoffs, Arena fired over 100 employees on Thursday. Bhargava resigned as Arena’s interim CEO on Jan. 5, citing potential conflicts of interest as his company, Bridge Media Networks, considers a substantial investment in Arena.

The situation remains fluid, and Authentic is determined to navigate Sports Illustrated through necessary changes.

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