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June 24, 2024

Mass Layoffs at Sports Illustrated Leave Iconic Brand in Jeopardy

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Jan 21, 2024

Sports Illustrated, the iconic American sports media brand known for its award-winning journalism and glamorous swimsuit issues, is facing an uncertain future after its parent company The Arena Group laid off nearly the entire staff on January 19th, 2023.

Arena Group Loses Licensing Deal, Guts SI Staff

The mass layoffs came just one day after Authentic Brands Group (ABG) revoked Arena Group’s license to publish Sports Illustrated. Without the licensing rights, Arena Group moved swiftly to cut costs by eliminating 155 of Sports Illustrated’s remaining 200 employees.

Arena Group, previously known as Maven, acquired the licensing rights to Sports Illustrated in 2019. But after Arena struggled to grow the brand and invest in content, ABG canceled the 40-year licensing deal.

In a statement, The Arena Group said the layoffs were part of a move “to transform the business model” after losing the brand license:

“This was an extremely difficult decision, and we are grateful for the dedication and expertise of the SI team. However, the termination of the license agreement with ABG and sale of the IP means SI is no longer core to our go-forward strategy. We have many exciting opportunities ahead with the remaining brands in The Arena Group portfolio.”

But staffers and observers questioned the sudden gutting of a storied media property.

“I’m not sure what the business strategy ever was,” said one laid-off employee. “It felt like we were set up to fail.”

SI Writers, Editors Blindsided

Veteran SI reporters who had covered sports from LeBron James to Tom Brady were let go. Many learned their fate in blunt two-minute phone calls or hastily scheduled Zoom meetings.

“It’s a really sad day, and I feel especially awful for the journalists who poured their hearts into their work,” said CNN media analyst Oliver Darcy.

With so many experienced journalists cut loose, many doubted whether SI would continue to produce the same level of sports journalism.

“I thought I still had a few more SI cover stories left in me,” said senior NFL writer Jim Trotter, who tweeted that he was “absolutely crushed” by the layoff news.

Uncertain Future for an American Icon

The layoffs threw SI’s future into doubt. While Arena Group’s CEO vowed to continue the brand in some form, it remained unclear how the tiny remaining operation could sustain SI’s legacy.

Launched by Time Inc. in 1954 as a weekly magazine, SI redefined American sports journalism with award-winning stories, creative photography, and an early mastery of television.

“SI was the gold standard,” wrote USA Today columnist Mike Freeman, who lamented the magazine’s decline at the hands of “predatory capitalists.”

From spotlighting barriers broken by Jackie Robinson to chronicling Muhammad Ali’s rise, SI gave weight and meaning to topics often overlooked by postwar sportswriters focused on statistics and game recap.

The brand expanded far beyond newsstands, leveraging its credibility to launch a radio network, website, and array of licensing deals. By 2014, SI could claim over 30 million monthly readers.

But the print magazine struggled financially as readership declined. After several ownership changes, Maven acquired the brand, pledging to revitalize SI for the digital age.

Those hopes now appear dashed after Arena’s short, tumultuous SI stewardship collapsed. Still, some held out optimism new backers could carry SI’s legacy forward even after its namesake magazine folds.

“| Year | Subscriber Numbers |
|-|-|-|
| 1964 | 2 million |
| 2014 | over 30 million|
| 2023 | ??? |

Table: Rise and fall of Sports Illustrated subscriber base over the decades

“The game’s not over,” former staffer Ryan Hunt told USA Today. “There are good people who will find places to tell these stories and inform.”

But after the mass layoffs, only time will tell if SI’s next chapter matches the rings of glory in its storied past.

What’s Next for The Arena Group

While Sports Illustrated now only exists as a hollowed-out operation, The Arena Group aims to forge ahead with its other remaining brands like The Street, Parade magazine, and HubPages.

Arena Group’s CEO Ross Levinsohn attempted an optimistic tone about SI’s future in the company statement about the layoffs. But observers remain skeptical.

“It’s quite clearly the end of an era,” said New York Times media columnist Ben Smith. “The question is whether anything meaningful will replace it.”

Without its flagship sports brand, The Arena Group faces its own uncertain path ahead. The company lost more than 30% of its stock value the day after the SI brand license was revoked.

And the company has seen prior issues – in 2019, Levinsohn left the company after being accused of sexual harassment at his previous job. Now as Levinsohn tries to salvage Arena Group post-SI, the company must quickly stabilize itself during a difficult period for digital media.

It remains far from clear whether Arena Group can transform its business model to survive the turbulent digital landscape that now lacks the lucrative licensing money from Sports Illustrated.

Observers urge skepticism of Levinsohn’s sunny outlook about Arena Group’s future prospects to rebound without its most famous brand in the portfolio.

“The destruction of the Sports Illustrated brand and newsroom is devastating,” Levinsohn said after resigning his Arena Group board seat. And devastating blows tend to linger as The Arena Group presses on without its former star athlete.

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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