Illustrated sport ends up in chaos with mass layoffs
The group that publishes Sports Illustrated said in an email Friday that it has laid off many, if not all, of the employees who work at the magazine, leaving the publication's future in doubt.
The move came after the Arena Group, which publishes the magazine under a complicated management structure, revoked its license to operate the publication.
It was unclear whether Sports Illustrated would continue publishing, or whether its owner, Authentic Brands Group, would enter into a new agreement with the 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. It once had more than three million subscribers, and its writing and reporting was considered the pinnacle of sports journalism. But it has been in disrepair for years. Like many publications, the magazine struggled to transition from print publications to the digital media world. In 2019, the media conglomerate sold Meredith Sports Illustrated to Authentic Brands Group, which is primarily a licensing company that acquires the rights to famous brands, for $110 million.
The Arena Group – owner of Men's Journal, Parade and TheStreet and formerly known as the Maven – then entered into a 10-year deal with Authentic Brands Group to operate and publish Sports Illustrated. It paid at least $45 million for the right to do this, while Authentic Brands Group retained commercial rights for things like a potential Sports Illustrated-branded hotel in Michigan.
Spokespeople for Authentic Brands Group and the Arena Group declined to comment Friday.
The union representing Sports Illustrated confirmed that Arena Group was laying off many, or possibly all, of Sports Illustrated's employees.
“This is another difficult day in four difficult years for Sports Illustrated under the leadership of the Arena Group (formerly the Maven),” the union said in a statement. “We call on ABG to guarantee the continued publication of SI and ensure that it can serve our audiences the way it has for nearly 70 years.”
It's been a particularly tumultuous few months at Sports Illustrated. In August, Manoj Bhargava, the entrepreneur behind the 5-Hour Energy drink, agreed to buy a major stake in the Arena Groupraising hopes that he could provide some degree of stability.
But shortly after Mr. Bhargava agreed to buy the stock, Sports Illustrated was thrown into chaos. Several senior executives from the parent company were forced out, including the CEO, Ross Levinsohn; the president, Rob Barrett; the chief operating officer, Andrew Kraft; and its general counsel, Julie Fenster.
In November, reports circulated that Sports Illustrated had published product reviews under fake author names, apparently generated by artificial intelligence, which the Arena Group blamed on a supplier.
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 them “one of the most disappointing things I have ever seen in my professional life.”
“The actions of this board and the destruction of Sports Illustrated's legendary brand and newsroom are the last straw,” Mr. Levinsohn wrote.
A spokesman for Mr Bhargava declined to comment.
The Arena Group arrived at the beginning of January reported that it had failed to make a $3.75 million payment to Authentic Brands Group, and was therefore in violation of the license agreement. At the same time, Mr Bhargava resigned as interim CEO “to avoid any conflict of interest” in an agreement the company signed with FTI Consulting to help turn around the business.
In 2020, shares of Arena Group traded as high as $14.20. On Friday they were trading for less than $1.