Sports Illustrated plunges into chaos due to massive layoffs

Sports Illustrated plunges into chaos due to massive layoffs

The group that publishes Sports Illustrated said in an email Friday that it is laying off many if not all employees who work at the magazine, putting the publication’s future in doubt.

The move came after Arena Group, which publishes the magazine under a complex management structure, had its license to operate the publication revoked.

It was unclear whether Sports Illustrated would continue publication, or whether its owner, Authentic Brands Group, would reach a new agreement with Arena Group or find a new company to operate it.

For decades, Sports Illustrated was a weekly Bible for sports fans and a financial engine for the Time Inc. empire. At one time it had more than three million subscribers, and its writing and reporting was considered the pinnacle of sports journalism. But it has been declining over the years. Like many publications, the magazine struggled to transition from print publishing to the world of digital media. In 2019, media conglomerate Meredith sold Sports Illustrated to Authentic Brands Group, primarily a licensing company that acquires rights to celebrity brands, for $110 million.

Arena Group – which owns Men’s Journal, Parade and The Street and was formerly known as Maven – signed a 10-year deal with Authentic Brands Group to operate and publish Sports Illustrated. it At least $45 million paid for the right to do so, while Authentic Brands Group retained commercial rights for things like Potential Sports Illustrated-branded hotel in Michigan,

Spokeswomen for Authentic Brands Group and Arena Group declined to comment Friday.

The union representing Sports Illustrated confirmed that Arena Group is laying off many, or possibly all, Sports Illustrated employees.

“This is another difficult day in a difficult four years for Sports Illustrated under the leadership of Arena Group (formerly Maven),” the union said. said in a statement, “We are calling on the ABG to ensure the continued publication of SI and allow it to serve our audience for nearly 70 years.”

It’s been a particularly tumultuous several months at Sports Illustrated. In August, Manoj Bhargava, the entrepreneur behind 5-Hour Energy Drink, Agreement reached to buy major stake in Arena GroupRaising hopes that it might provide some degree of stability.

But soon after Mr. Bhargava agreed to buy the stake, Sports Illustrated was thrown into chaos. Several senior executives of the parent company were ousted, including its chief executive, Ross Levinsohn; Its president, Rob Barrett; Its chief operating officer, Andrew Craft; and its general counsel, Julie Fenster.

In November, reports circulated that Sports Illustrated had published product reviews under fake author names generated by artificial intelligence, for which Arena Group blamed a vendor.

Mr. Levinsohn — who himself oversaw cuts to Sports Illustrated’s newsroom amid industry headwinds — resigned from Arena’s board on Friday. He responded to news of the layoffs on LinkedIn, calling it “one of the most disappointing things I’ve ever seen in my professional life.”

“This board’s actions and the destruction of Sports Illustrated’s iconic brand and newsroom are the last straw,” Mr. Levinsohn wrote.

A spokesman for Mr. Bhargava declined to comment.

In early January, Arena Group Report says he has failed to pay $3.75 million to Authentic Brands Group, and thus it was a violation of its licensing agreement. At the same time, the company resigned from the position of its interim chief executive “to avoid any conflict of interest” in an agreement signed with FTI Consulting to help transform the business.

In 2020, Arena Group shares traded as high as $14.20. On Friday, they were trading at less than $1.

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