by Sports Illustrated, the venerable bible of sports journalism, has been in decline for years, as the Internet killed off print magazines and cost cuts turned the weekly into a monthly and cut its staff. But on Friday the magazine received perhaps its hardest blow yet.
The company that publishes Sports Illustrated said in an email to employees that it was laying off many of them, leaving in doubt what lies ahead for the publication.
The move came after Arena Group, which publishes the magazine and website under a complicated management structure, had its license to operate the publication revoked.
On Friday, Sports Illustrated reporters and editors were asked to attend a Zoom call at 2 p.m. ET. It lasted just seven minutes. On the call, Jay Frankl, Arena Group’s newly hired chief business transformation officer, said, “We will continue to produce the Sports Illustrated brand and online content until the situation is fully resolved,” according to a recording of the meeting heard by The New York Times. No questions were accepted.
Some Sports Illustrated staff members received emails with immediate layoff notices, while others were told in subsequent Zoom meetings that they would keep their jobs for at least 90 days. (Approximately 100 journalists work for Sports Illustrated.) Arena Group executives told Sports Illustrated staff members that they planned to continue publishing the magazine and website, even though their license to operate the publication was revoked. But it was not immediately clear how that would work. It was also unclear whether the magazine’s owner, Authentic Brands Group, would sign a new deal with Arena Group or find a new company to operate it.
But it seems certain that even if Sports Illustrated survives in some form, it will be severely diminished.
The mood among staff members following the layoff announcement was a mix of anger, frustration and confusion. Sports Illustrated journalists texted and messaged each other on Slack, in some cases unsure of who had been fired and what the magazine’s ultimate fate would be.
For decades, Sports Illustrated was a weekly must-read for sports fans and a financial engine for the Time Inc empire. It once had more than three million subscribers, and its writing, reporting and photography were considered the pinnacle of sports journalism. . Landing on the cover was the most coveted endorsement an athlete could receive, even in the age of television and the Internet. And her annual swimsuit issue was a pop culture phenomenon.
“I think it’s one of the best magazines that has ever existed, with some of the best photographers, writers and editors who have ever been in one building,” said Rick Reilly, who for years wrote the popular back-page column for Magazine. And he added: “If he’s really dead, it’s like he’s been dying.”
In fact, Sports Illustrated has been in trouble for years. He struggled to move into the world of digital media and was hampered by poor management.
Meredith bought Time Inc., which included Sports Illustrated and other media assets, for $3 billion in 2017. Two years later, the media conglomerate sold Sports Illustrated to Authentic Brands Group, which is primarily a licensing company that acquires the rights to celebrity brands. for 110 million dollars. It was bought for the value of the Sports Illustrated name and intellectual property, not because Authentic Brands Group intended to publish a magazine.
Arena Group, owner of Men’s Journal, Parade and TheStreet and formerly known as Maven, quickly struck a 10-year deal with Authentic Brands Group to operate and publish Sports Illustrated. He paid at least 45 million dollars for the right to do so, while Authentic Brands Group retained commercial rights for things like a potential Sports Illustrated-branded hotel in Michigan.
In a statement, Authentic Brands Group said it was committed to ensuring that “the Sports Illustrated brand, including its publishing arm, continues to thrive as it has for the past nearly 70 years.”
Arena Group is in negotiations with Authentic Brands Group and plans to continue publishing Sports Illustrated, said Rachael Fink, a spokeswoman for Arena Group. “We hope to be the company that moves SI forward, but if not, we trust someone will,” he said in a statement.
Over the past decade, Sports Illustrated’s newsroom has shrunk. The last remaining photographers at the company, the Sports Illustrated “illustrators,” were laid off in 2015, and several rounds of layoffs followed. The magazine, which was previously published weekly, is now published monthly. Many of the stories on their website are now written by underpaid contractors.
Despite those changes, the publication’s digital audience has grown steadily. In December, Sports Illustrated attracted more than 50 million visitors, according to Comscore, doubling its audience from four years earlier.
The layoffs at the magazine are the latest bad news for the publishing industry, whose fortunes have gone from bad to bleak in recent months. Landmark publications like The Los Angeles Times and The Washington Post, which are owned by deep-pocketed billionaires, have trimmed their newsrooms over the past year as advertising revenue dried up and attracting new online subscribers proved elusive. Even startups once hailed as the future of the media industry, such as BuzzFeed and Vice, have abandoned or sharply reduced their newsgathering efforts as investors became discouraged with digital publishing.
The union representing Sports Illustrated confirmed that Arena Group was laying off many Sports Illustrated employees.
“This is another difficult day in what has been a difficult four years for Sports Illustrated under the leadership of Arena Group (formerly Maven),” the union said. said in a statement. “We call on ABG to ensure the continued publication of SI and allow it to serve our audience as it has for almost 70 years.”
It’s been a particularly tumultuous few months at Sports Illustrated. In August, Manoj Bhargava, the entrepreneur behind the 5-Hour energy drink, agreed to buy a significant stake in Grupo Arenaraising hopes that it could provide some stability.
But soon after Bhargava agreed to buy out the stake, Sports Illustrated was plunged into chaos. Several of Arena Group’s senior executives were forced to leave the company, including its CEO, Ross Levinsohn; its president, Rob Barrett; its chief operating officer, Andrew Kraft; and its general counsel, Julie Fenster.
In November, reports circulated that Sports Illustrated had published product reviews under fake author names, apparently generated by artificial intelligence, which Arena Group attributed to a vendor.
“My God, they had AI writers with backstories, robots they were trying to pass off,” Reilly said, before invoking renowned Sports Illustrated writers. “This is a place that hired Jim Murray and Dan Jenkins!”
The situation got worse after that. At the beginning of January, the Arena Group failed to make a $3.75 million payment to Authentic Brands Group, breaching their license agreement. Days later, Bhargava resigned as interim CEO and the company signed an agreement with FTI Consulting to help improve the business.
Things came to a head on Thursday, when Authentic Brands Group sent Arena Group a letter terminating Sports Illustrated’s license, according to public documents, prompting an immediate payment of $45 million to Authentic Brands Group. On the same day, Arena Group announced it would cut a third of its workforce.
Levinsohn, who oversaw cuts in the Sports Illustrated newsroom amid industry headwinds, resigned from Arena’s board of directors on Friday. He reacted to news of the layoffs on LinkedIn, calling them “one of the most disappointing things I’ve ever witnessed in my professional life.”
A spokesperson for Bhargava, Steve Janisse, said in a statement that Arena Group was in “active negotiations” with Authentic Brands.
“And we are not the only ones,” Janisse wrote. “Others have also approached them. Based on this interest, we hope that the great institution of Sports Illustrated will continue, survive and grow.”
In 2020, Arena Group shares were trading as high as $14.20. On Friday they were trading for less than $1.
