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May 29, 2024

Sports Illustrated Left Reeling as Arena Group Revokes License

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Jan 20, 2024

Sports Illustrated, the iconic American sports media brand known for its photography and journalism, has been plunged into crisis after its publisher Arena Group abruptly revoked its licensing agreement and announced mass layoffs of the magazine’s staff.

Background: A Storied Brand Falls on Hard Times

Founded in 1954, Sports Illustrated grew over the decades into one of the most recognizable and influential sports publications in the world. With circulation topping 3 million in the 1980s, the magazine was a cultural force thanks iconic covers, investigative features, and annual franchises like the highly anticipated swimsuit issue.

However, Sports Illustrated began struggling financially in the early 2000s as the media landscape shifted online and print advertising declined. In 2019, brand management company Authentic Brands Group (ABG) purchased Sports Illustrated for $110 million. The following year, ABG licensed publishing rights to digital platform Arena Group.

Arena Group aimed to revitalize Sports Illustrated for the digital age, but the partnership quickly ran into difficulties. Last year, an investigative report using AI to generate quotes sparked a plagiarism scandal, tarnishing the magazine’s sterling reputation. Sports Illustrated also failed to meet revenue targets in 2022.

Arena Group Revokes License, Announces Mass Layoffs

Tensions between Sports Illustrated and Arena Group reached a breaking point this week. On January 19th, Arena Group abruptly announced it was terminating its licensing agreement with Sports Illustrated. In a shock move, the publisher also stated it had laid off the entire Sports Illustrated staff, about 150 employees.

The mass layoffs place the future of the iconic 69-year old brand in serious doubt. Sports Illustrated journalists reported the news themselves on social media after being told they no longer had jobs. “Today I was laid off along with the entirety, or very close entirety, of Sports Illustrated’s editorial staff,” tweeted senior writer Alex Prewitt.

In a memo, Arena Group CEO Ross Levinsohn attempted to reassure staff. “The Sports Illustrated business has been steadily improving under our management team and we fully expect it to continue its positive trajectory,” he insisted. Nevertheless, it remains unclear whether Arena Group plans to completely shut down Sports Illustrated or replace it with a pared-down digital version.

Impacts: Venerable Brand Left in Limbo

The day’s shocking developments have sent shockwaves through the sports media world.

For loyal readers and Sports Illustrated stalwarts, the magazine’s abrupt downfall is the end of an era spanning seven decades. “Today feels like a death of the brand as we know it,” remarked Jim Trotter, a 24-year veteran SI writer. Many now fear Sports Illustrated will go the way of other once-mighty print publications like Newsweek that struggled to stay relevant online.

For professional sports leagues and athletes, the loss of Sports Illustrated’s independent, in-depth coverage is a major blow. The NBA, NFL, and other leagues have counted on signature franchises like the iconic swimsuit issue to drive interest and coverage. Star athletes now have one less venue to tell their stories to a national audience.

The company most immediately impacted is of course Arena Group itself. After its shares plunged over 20% on news of the licensing loss and layoffs, Arena Group now faces thorny business choices. It can try to rebuild a pared-down, digital-only version of SI while battling a public relations crisis. Or the publisher may choose to cut its losses by shuttering the brand it has evidently failed to profitably revitalize.

Other media companies are also assessing the fallout from a rising tide of layoffs across the industry. “There’s a reckoning underway regarding the economics of written content online,” suggested New York Times media columnist Ben Smith. Publications both new and old may need to take a hard look at their business models in amarket where even iconic brands are now failing.

What Comes Next for a Diminished Sports Media Titan

In the wake of Thursday’s bombshell developments, the road ahead for Sports Illustrated is filled both perils and, perhaps, opportunities.

In the short term, the focus turns to Arena Group and whether it can salvage value from the now damaged SI brand. While Levinsohn has stated his intention to continue publishing under the Sports Illustrated banner, crippled by mass layoffs and plagiarism scandals, the company faces extreme challenges making that economically viable. Many analysts believe Arena Group is likely to sunset print operations entirely in favor of a digital-only presence – if SI continues at all.

Further out, the dramatic downsizing of such an iconic name opens up market share in the wider sports media landscape. Rival publishers like The Athletic now have a chance to capture displaced talent and readers. Niche player The Athletic has notably stated its goal of hitting 1 million subscribers after multiple rounds of layoffs at places like ESPN.

For creatives like photographers and journalists abruptly let go by SI, the path forward is also unclear. “An entire generation of talent was wiped out today,” wrote reporter Jimmy Traina. While some may find homes at competitors, the industry-wide contraction could effectively end careers.

Above all, there remains a sense the abrupt demise of the once-mighty Sports Illustrated is an inflection point for sports media. The iconic magazine that once reached millions of American homes is suddenly on life support, revealing deep fissures in a changing landscape. How the SI saga ultimately concludes could significantly reshape the coverage fans have come to expect around their favorite leagues, teams and stars.

Key Figures

Year Founded 1954
Peak Circulation >3 million (1980s)
Authentic Brands Group Purchase Price $110 million (2019)
Current Owner Arena Group
Layoffs Announced Nearly entire ~150 person staff (January 2023)

The events of January 19th, 2023 have thrown both the future of 69-year old Sports Illustrated and a wider reckoning in sports media into sharp relief. As Arena Group scrambles to chart a path forward, creatives seek new opportunities, and readers around the nation lament the end of an era, the coming months promise to reverberate with aftershocks from the sudden plunge of an iconic American sports giant.

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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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