Conglomerate Arena Group will lay off most of its staff from sports magazine Sports Illustrated (SI) after brand management company Authentic Brands Group (ABG), its owner, revoked Arena’s license to publish the magazine.
The New York-based Sports Magazine Association said in a statement on its website that employees were informed by email today that “a significant number, possibly all” of them would be laid off due to the revocation of the arena’s license.
Hours after the announcement, Arena Group fell 38% on the Wall Street market, and its shares were trading below $1 each.
“This is another difficult day in 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 as 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 pay ABG $3.75 million; Following the announcement, its interim CEO, Manoj Bhargava, resigned “to avoid any conflict of interest”.
Last year, the company was embroiled in a scandal when it was revealed that it had published articles and photos made from artificial intelligence, leading to the resignation of its former CEO, Ross Levinsohn.
For decades, Sports Illustrated was a leading magazine in the world of sports, amassing three million subscribers, but according to the New York Times, it had problems adapting to the digitalization of the sector.
In 2019, its then-owner, Meredith Group, sold it to Authentic Brands Group, a licensing company primarily focused on celebrity brands such as Marilyn Monroe, Elvis Presley or David Beckham.
Arena Group struck a deal with ABG worth at least $45 million to exploit and publish Sports Illustrated, with the licensing company retaining its commercial rights.
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