Authentic Brands Group (ABG), the owner of Sports Illustrated, has decided to revoke the license for publishing SI from Arena Group. This move was officially communicated to Arena Group on Thursday, January 18th, leading to significant repercussions for the staff associated with the SI brand.
Arena Group, a publicly traded publisher, acquired the rights to publish Sports Illustrated in 2019 from ABG. ABG, known for acquiring intellectual property and making money through licensing deals, purchased SI from a traditional publishing house for $110 million in the same year. Arena Group had missed a $3.75 million quarterly payment on its license by the end of 2023, triggering ABG's right to revoke the license. Discussions were initiated in early January to salvage the arrangement, as mentioned in a Securities & Exchange Commission filing by Arena Group.
In response to the license revocation, Arena Group now faces an immediate payment obligation of $45 million to ABG, based on the terms of their agreement. However, Arena Group suggests that the loss of the license or specific financial terms are not definitively established, stating ongoing discussions with ABG regarding the Licensing Agreement.
The ABG license granted Arena the rights to publish various SI-related properties, including SI for Kids, the swimsuit issue, SI-branded events, as well as video and audio media in English and Spanish across several regions. The agreement allowed Arena Group the option to renew its license for up to 100 years if regular quarterly payments were maintained.
In the wake of this development, Arena Group has announced a significant workforce reduction, laying off one-third of its total staff, incurring estimated costs ranging from $5 million to $7 million.
While a response from ABG is still pending, the NewsGuild of New York, representing SI reporters, expressed concern about potential job losses for SI staff and urged ABG to find an alternative publisher to preserve jobs. Arena Group, in addition to SI, publishes other titles such as The Hockey News, The Street financial news site, Parade, and Men’s Journal. Recently, Arena Group announced the elimination of over 100 staff positions at non-SI publications as part of a transformative shift towards a streamlined business model.
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