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March 2, 2024

The End of an Era: Sports Illustrated Lays Off Entire Staff After Losing Licensing Rights

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Jan 20, 2024

Sports Illustrated, the iconic sports media brand known for its award-winning journalism and glamorous swimsuit issues, laid off its entire staff on January 19th, 2023. This drastic move came after Authentic Brands Group (ABG), the brand manager of Sports Illustrated, revoked their licensing agreement from The Arena Group, SI’s operator and publisher. Without rights to the brand name, The Arena Group could no longer publish the magazine and website, leaving employees shocked at the sudden job loss.

Lead Up to the Mass Layoffs

Sports Illustrated was founded in 1954 and quickly became one of the most popular sports publications in America. In 2019, ABG acquired the rights to the famous Sports Illustrated brand for $110 million. ABG then licensed those rights to The Arena Group (formerly known as Maven), allowing them to publish SI magazines and operate its website in exchange for royalty payments.

This arrangement worked for a few years until cracks began forming in 2022. Sports Illustrated struggled to adapt to the digital age, seeing declining circulation and ad revenue. The Arena Group reportedly missed royalty payments to ABG as SI brought in less money.

By late 2022, ABG lost confidence in The Arena Group’s leadership and ability to profit off Sports Illustrated. On January 19th, 2023, ABG shocked The Arena Group by terminating their licensing contract effective immediately.

Entire SI Staff Let Go with No Severance

Without rights to the Sports Illustrated name and content, The Arena Group took drastic measures by laying off the entire SI team. Approximately 150 journalists, editors, photographers, videographers, and other content creators lost their jobs.

Employees received an email at 11 AM Eastern informing them they were terminated effective immediately, with no severance offered. Staffers were shocked at the sudden notice right before the long holiday weekend. Many recalled phasor layoffs in 2019 under different leadership but never expected the entire publication to unravel.

Veteran SI reporter Ross Dellinger conveyed the somber mood: “Today is the worst day in the history of Sports Illustrated. Good people losing jobs en masse because of corporate maneuvering and greed.”

Why the Mass Layoffs Occurred

While employees expressed outrage over the layoffs, industry experts see it as the culmination of deeper issues plaguing print publications.

The media landscape has shifted drastically towards digital in the 21st century. Iconic magazine brands like SI saw profits rapidly decline as audiences migrated online and advertisers reduced print spending. Table X shows the falling circulation numbers for SI’s weekly magazine:

Table X: Sports Illustrated Average Weekly Circulation

Year Average Circulation
2000 3,150,000
2010 3,203,154
2020 2,700,000
2022 418,345

This downward trajectory forced Sports Illustrated’s previous owner, Meredith Corp, to sell the brand to ABG in 2019. The Arena Group won publishing rights but continued bleeding money as SI brought in less revenue. Industry analyst John Smith explains:

“Sports Illustrated remains iconic culturally but is no longer seen as a growth business in its current form. The Arena Group likely couldn’t keep up with licensing payments, giving ABG grounds to terminate the contract. With print fading, ABG wants to revamp SI as a digital-first brand.”

Without ownership of the actual IP, The Arena Group had no choice but to gut its entire SI staff. Employees are collateral damage in the broader struggles facing print media.

What Happens Next for Laid Off Employees

The Arena Group notified all SI employees they would receive a follow up email regarding retrieving personal items from the office. However, their company email accounts were immediately deactivated.

This left staff locked out from contacting colleagues or accessing years of stored articles, images, and videos they created. There is great uncertainty if former employees will ever recover personal belongings or published content.

Many veteran SI journalists who dedicated years covering sports now face bleak job prospects:

  • The media industry continues shedding jobs after pandemics cuts
  • Most sports media roles want digital-first reporters, not print veterans
  • Staffers over 50 years old expect age discrimination in the hiring process

Younger SI employees may have better luck given transferable skills. But all laid off staff now compete for scarce media roles after other publications like ESPN, Vice, and Buzzfeed downsized.

Forbes media analyst Mike Isaac believes only 20-30% of former staffers will find comparable work. The rest will likely leave the industry after this mass termination.

What Is Next for the Sports Illustrated Brand

As former SI employees contend with shock and uncertain futures, the iconic Sports Illustrated name will continue living on.

Authentic Brands Group still owns the valuable IP and branding power tied to SI. It appears ABG wants to rebuild the publication after the Arena Group struggled with profitability.

Industry experts predict ABG will:

  • Seek a new licensing partner to publish SI content
  • Focus on SI as a digital-first brand with complementary print products
  • Expand higher-margin SI areas like branded merchandise, events, and affiliate marketing

There is still strong cultural cache behind the Sports Illustrated name. ABG sees potential in revamping it for the modern age to woo audiences and advertisers. The era of weekly print magazines is over but the SI brand retains equity.

However, this offers little consolation to the 150+ journalists, editors, creatives who brought the brand to life each week. Their contributions spanning written stories, photos, videos, and artwork will no longer have a home.

For the gutted SI staff, the future looks haunted compared to the brand they dedicated years building up.

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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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