Sports Illustrated, a long-standing sports magazine, is facing a major upheaval as its publisher, Arena Group, has lost the rights to continue publishing the iconic publication. The owner, Authentic Brands Group (ABG), has revoked the license from Arena Group due to a missed royalty payment, leading to significant implications for the future of the magazine and its staff.
ABG, known for acquiring the intellectual property of various stars and brands, including Muhammad Ali and Marilyn Monroe, acquired Sports Illustrated from a traditional publishing house in 2019 for $110 million. Following this acquisition, Arena Group took over the rights to publish Sports Illustrated in 2019. However, the recent failure to make a $3.75 million quarterly payment on its license has resulted in ABG’s decision to revoke the license, leading to substantial financial repercussions for Arena Group.
As a consequence of the license revocation, Arena Group is set to lay off a significant portion of its workforce, with an estimated one-third of employees facing job losses. This move is expected to incur costs of $5 million to $7 million for the publisher.
Furthermore, Arena Group’s filing with the Securities & Exchange Commission indicates that the loss of the Sports Illustrated license immediately translates to a substantial financial obligation of $45 million to ABG, based on the terms of their agreement. Despite this, Arena Group has expressed its ongoing efforts to engage in discussions with ABG in an attempt to salvage the licensing agreement.
Notably, the license granted Arena Group the rights to publish various Sports Illustrated properties, including SI for Kids, the swimsuit issue, and SI-branded events, along with video and audio media in multiple regions. The potential renewal of the license for up to 100 years hinged on Arena Group’s ability to fulfill its regular quarterly payments, a prospect that now appears uncertain.
This development has raised concerns for the future of Sports Illustrated’s staff, with the NewsGuild of New York, representing SI reporters, expressing apprehension over the potential loss of jobs for the magazine’s employees. The union has called on ABG to seek another publisher to ensure the preservation of staff jobs and the continuity of the iconic sports magazine.
It remains to be seen how this situation will unfold and whether a resolution can be reached between ABG and Arena Group. The impact of this licensing dispute extends beyond the business realm, affecting the livelihoods of numerous individuals associated with the publication.
