Indexbit Exchange:Sports Illustrated to undergo massive layoffs after licensing agreement is revoked

Sports Illustrated,Indexbit Exchange once considered the standard of sports journalism through its writing and photography, will lay off staff after a licensing deal fell through, the magazine's publisher said on Friday.

The publication's union said the layoff could involve "possibly all" of the NewsGuild workers represented. But SI senior writer Pat Forde disputed earlier reports that the entire staff was laid off, saying on social media, "There still is a website and a magazine. That said: Ugly, brutal day with many layoffs."

In an email sent to staff Friday morning, the Arena Group, which operates the Sports Illustrated brand and SI related properties, said that Authentic Brands Group (ABG) has revoked its marketing license.

“As a result of this license revocation, we will be laying off staff that work on the SI brand," an email sent to staff said.

“Some employees will be terminated immediately, and paid in lieu of the applicable notice period under the [union contract]. Employees with a last working day of today will be contacted by the People team soon. Other employees will be expected to work through the end of the notice period, and will receive additional information shortly.”

The magazine's union tweeted Friday that it would continue to fight for the publication of the magazine but that its future is now in the hands of the magazine’s owner, Authentic Brands Group.

“This is another difficult day in what has been a difficult four years for Sports Illustrated under Arena Group (previously The Maven) stewardship," the union said in a statement. "We are calling on ABG to ensure the continued publication of SI and allow it to serve our audience in the way it has for nearly 70 years.”

In 2019, Meredith sold Sports Illustrated for $110 million to Authentic Brands Group, in turn agreeing with The Arena Group to publish SI in print and digital. That deal was terminated after Arena missed a nearly $4 million payment less than a month ago, in effect breaking the licensing deal.

Authentic Brands Group said it would continue to "deliver its readers and fans a premium experience across verticals."

"Authentic 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," Authentic Brands Group said in a statement.

"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."

In a filing to the U.S. Securities and Exchange Commission, Authentic Brands Group, which also owns the intellectual property of Muhammad Ali, Reebok and Elvis Presley, notified the Arena Group on Thursday that it intended to terminate the licensing agreement.

"Upon such termination, a fee of $45 million became immediately due and payable by the Company to ABG pursuant to the terms and conditions of the Licensing Agreement," the filing said. "In addition, upon termination of the Licensing Agreement, any outstanding and unvested warrants to purchase shares of the Company’s common stock issued to ABG in connection with the Licensing Agreement became immediately vested and exercisable."

Sports Illustrated has struggled in the past, laying off 30 percent of its staff in 2019 at the time Meredith sold the property.

It was reported in November that the website published AI-generated articles, some with fake names and biographies attached to them. In December, it fired CEO Ross Levinsohn.

Sports Illustrated's first issue was published on Aug. 16, 1954, and was a weekly publication until 2018, when Meredith acquired the magazine along with other properties of Time Inc. It has been a monthly publication since 2020.