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February 27, 2024

Sports Illustrated Guts Staff After Losing Brand Licensing

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Jan 20, 2024

Sports Illustrated, the iconic American sports media brand, laid off nearly its entire staff on January 19th after its parent company lost the licensing rights to the publication’s name and content. Employees were notified in the morning that they would be terminated immediately, with only skeleton staff remaining.

The drastic move plunges the famous magazine, which has published continuously since 1954, into deep uncertainty about its future.

Arena Group Loses SI Brand License

Sports Illustrated is owned and published by Arena Group, which acquired it in 2019. Earlier in January, Authentic Brands Group (ABG) revoked Arena Group’s license to use the Sports Illustrated brand.

ABG purchased the rights to the Sports Illustrated name and intellectual property in 2019 for $110 million. At the time, the previous publisher Meredith Corporation made a deal to outsource publishing operations to Arena Group while retaining rights to the brand.

However, Arena Group fell behind on licensing fee payments to ABG, which moved to seize back brand control this month. Without rights to the iconic Sports Illustrated identity and content, Arena Group was forced to immediately halt regular magazine and website operations.

Hundreds of Staff Let Go with No Severance

On January 19th, Arena Group CEO Ross Levinsohn and Chief Content Officer Steve Cannella notified staff they would be terminated effective immediately, citing the licensing loss. Employees estimated that over 200 people across editorial, video, design and social media teams lost their jobs.

The abrupt layoffs came without any severance pay or health insurance extension. Sports Illustrated’s union heavily criticized Arena Group for its handling, saying the company violated federal laws by not providing adequate notice or compensation. Many long-serving employees were shocked at the sudden loss of their livelihoods.

Department Estimated Layoffs
Editorial 150
Video 20
Design 20
Social Media 10
Total Over 200

Veteran NFL reporter Jim Trotter, who had been at Sports Illustrated for nine years, tweeted that while losses hurt, ‘it’s the callousness with which good people were treated today that angers me.’ Employees said the mass termination was ‘cruel’ and ‘inhumane’, especially combined with the lack of financial support.

What Happens Next to Iconic Brand?

The future of America’s leading sports media outlet is now deeply unclear a week after the brand licensing shock. While ABG says it aims to continue the Sports Illustrated business in some form, the company has gone silent on concrete plans. It hasn’t commented on reviving any magazine or website operations.

Industry observers believe ABG acquired the intellectual property mainly to boost exploitation of the famous brand through licensing deals. Sports Illustrated has a vaunted 64-year legacy in high-quality sports writing and investigative journalism. It’s best known for in-depth features and award-winning yearly special issues like the iconic swimsuit edition.

However, operating the actual media business has become financially challenging, with both Meredith and Arena Group struggling to make it profitable after print advertising declines. Laying off the remaining publishing infrastructure to cut costs aligns with a strategy focused on maximizing brand licensing royalties.

Legacy Staff and Readers React to Closure Fears

While ABG remains vague about relaunching a media platform, the mass layoffs sparked strong reactions from longtime Sports Illustrated contributors and devoted readers.

Legendary sportswriter Rick Reilly, who started at the magazine in 1985, said he was ‘shattered’ by news of the terminations:

This is like watching a family home burn down. Nobody did sports bigger or better than SI in our time. Nowhere to go but down from here.

Reilly captures the sorrow many feel seeing an esteemed institution facing extinction after providing sports fans with premium content for nearly 70 years. Beloved former staff members likeNBA writer Chris Mannix lamented the loss of reporting firepower:

Terrible news. Incredibly talented journalists are out of work. Investigative capabilities have been gutted. The end may very well be near for what was once one of the gold standards in sports journalism.

While SI defined top-tier sports coverage for generations, the dried-up economics of publishing put its future in doubt in a new digital era. Devoted subscribers responded that they’ll sorely miss their ‘weekly dose of sports illustrated’ if America’s ‘best sports magazine ever’ can’t find a way to return.

Arena Group Vows to Fight for Brand Rights

Arena Group leadership claims they still retain certain rights to publish Sports Illustrated content, and legally contest ABG terminating their license. CEO Ross Levinsohn said the mass layoffs were only made due to immediate financial pressures from ABG’s actions.

But industry lawyers expect ABG to prevail in any licensing dispute. The layoffs indicate Arena Group lacks financial capacity to responsibly run magazine and website operations for such an iconic brand.

Still, Levinsohn insists the company ‘remains committed to Sports Illustrated’s journalism and storytelling’ despite shocking recent events. But faith is low that Arena Group can revive regular operations after effectively gutting remaining staff. Most SI employees comment they were treated as expendable despite loyal dedication to the outlet many grew up loving.

The dramatic January 19th layoffs place Sports Illustrated’s future as a leading sports media company under a dark cloud. Further brand licensing legal battles loom while abandoned staff and readers long for its glory days of in-depth sports coverage. With so much talent cleared out the door, hopes fade for a true relaunch of SI’s once-defining reporting legacy.

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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.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

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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