Sports Illustrated Lays Off Staff as Licensing Agreement is Terminated

Sports Illustrated, a renowned magazine, is undergoing significant changes as its publisher, The Arena Group, is laying off a large portion of its staff. This decision comes shortly after the licensing agreement between Authentic Brands Group (ABG) and The Arena Group was terminated, leading to uncertainty about the future of the publication.

The licensing agreement, which began in 2019, allowed The Arena Group to publish Sports Illustrated in both print and digital formats. However, ABG decided to revoke the license after The Arena Group missed a $3.75 million payment, breaching the agreement. As a result, a termination fee of $45 million is due to ABG.

Employees at Sports Illustrated received the distressing news of the layoffs on Friday. While some were immediately let go, others were given a 90-day notice period. The fate of the remaining staff will depend on whether the licensing issue can be resolved within that time frame.

It remains unclear whether ABG will search for a new operator or reconsider its decision and allow The Arena Group to renegotiate their current deal. Nonetheless, insiders suggest that ABG is determined to streamline the publication’s operations and guide it towards a necessary transformation.

Sports Illustrated has faced challenges in adapting to the digital landscape and maintaining its financial stability in recent years. The situation worsened when reports emerged suggesting that the publication’s website had published undisclosed paid reviews. This controversy was followed by a meeting led by Manoj Bhargava, the founder of 5-Hour Energy, who had recently taken a leadership role at The Arena Group. During the meeting, Bhargava expressed frustration with the excessive workload and emphasized the need to prioritize essential tasks.

Authentic Brands Group acquired Sports Illustrated from Meredith in 2019. The Arena Group, formerly known as Maven, paid ABG $45 million upfront for a 10-year licensing agreement. Ross Levinsohn served as the CEO of both Sports Illustrated and The Arena Group until recently, when the company began acquiring other struggling media outlets under his leadership, such as Men’s Journal.