Sports Illustrated Hit With Mass Layoffs After Missed Payment by Publisher

Sports Illustrated's entire staff was told on Friday that their jobs have been eliminated after Authentic Brands Group, which licenses the Sports Illustrated brand, revoked Sports Illustrated's license to publish due to a missed payment. 

How did this happen? In an SEC filing this month, SI operator The Arena Group said that it did not make a quarterly payment of around $3.75 million. Authentic Brands issued The Arena Group a notice of breach and terminated the two companies' agreement to publish SI in print and digital.

The Arena Group told SI staff on Friday in an email that due to the license revocation, it would be laying off staff, with many employees terminated immediately. Others would be given 90 days' notice, and any employees still at the company following those 90 days will be laid off unless the licensing issue becomes a non-issue, which kind of seemed like The Arena Group's whole job in the first place.

Years of turmoil: Sports Illustrated's longtime home was Time Inc., but Time Warner sold Time Inc. to Meredith in 2017 for nearly $3 billion. Authentic Brands acquired SI from Meredith in 2019, and The Arena Group, which previously operated as Maven, paid Authentic $45 million up front as part of a 10-year licensing agreement. Authentic's notice of termination last week triggered a $45 million fee due immediately.

What they're saying: It's unclear what's ahead for SI, though Authentic Brands said in a statement that it is "here to ensure that the brand of Sports Illustrated, which includes its editorial arm, continues to thrive as it has for the past nearly 70 years."

"We are confident that going forward the brand will continue to evolve and grow in a way that serves sports news readers, sports fans, and consumers," the statement continued. "We are committed to ensuring that the traditional ad-supported Sports Illustrated media pillar has best in class stewardship to preserve the complete integrity of the brand’s legacy."

The Sports Illustrated Union said in a statement​​​​​​​ on social media that it expects The Arena Group "to honor all the terms of our union contract and will fight for every one of our colleagues to be treated fairly."