Arena Group Faces Layoffs and Stock Plunge After Losing License for Sports Illustrated
New York-based conglomerate Arena Group is set to lay off most of its employees from the iconic sports magazine Sports Illustrated (SI) after its owner, Authentic Brands Group (ABG), revoked Arena’s license to publish the magazine.
In an email sent out today, employees were informed that there would be “a significant number of layoffs, possibly all” due to the cancellation of Arena’s license, the New York-based sports magazine’s union explained in a statement on its website.
Following the announcement, Arena Group’s stock fell 38% on the Wall Street market, with each of its shares trading below $1.
“This is another difficult day in what has been a difficult four years for Sports Illustrated under Arena Group management. We ask ABG to ensure the continuity of SI’s publication and allow it to serve its audience in the way it has for the past 70 years,” the union said.
In early January, Arena reported that it had breached its licensing agreement by failing to make a $3.75 million payment to ABG, leading to the license revocation. Following the announcement, its interim CEO, Manoj Bhargava, resigned “to avoid any conflict of interest.”
The company’s troubles are not new – last year, it was embroiled in a scandal after it was revealed that it had published articles and photos made with artificial intelligence, leading to the resignation of its former CEO, Ross Levinsohn.
Sports Illustrated, once a leading magazine in the world of sports with three million subscribers, has had difficulty adapting to the digitalization of the sector. In 2019, its then owner, the Meredith group, sold it to Authentic Brands Group, a licensing company focused primarily on celebrity brands such as Marilyn Monroe, Elvis Presley, or David Beckham.
The Arena conglomerate had reached a deal with ABG to exploit and publish Sports Illustrated for at least $45 million, with the licensing company retaining its commercial rights. Now, with the license revoked, the future of the iconic sports magazine is uncertain.