Sports Illustrated, the venerable bible of sports journalism, has been in decline for years as the Internet wiped out print magazines and cost-cutting turned the weekly publication into a monthly publication and cut staff. But on Friday the magazine suffered perhaps its worst blow yet.
The company that publishes Sports Illustrated said in an email to employees that many of them would be laid off, leaving doubts about what is happening with 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.
Sports Illustrated reporters and editors were asked to join a Zoom call Friday at 2 p.m. Eastern Time. It only took 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 obtained by The heard New York Times. No questions were asked.
Some Sports Illustrated employees received emails with immediate layoff notices, while others were told in additional Zoom meetings that they would stay at their jobs for at least 90 days. Arena Group executives told Sports Illustrated staff that they intend to continue publishing the magazine and website despite having their license to operate the publication revoked. However, it wasn't immediately clear how that would work. It was also unclear whether the magazine's owner, Authentic Brands Group, would enter into a new agreement 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 decline sharply.
The mood among employees following the layoff announcement was a mix of anger, frustration and confusion. Sports Illustrated journalists texted and messaged each other on Slack, sometimes unsure 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 over three million subscribers and its writing, reporting and photography were considered the pinnacle of sports journalism. Landing on the cover was the most coveted honor an athlete could receive, even well into the television and internet era. And its annual swimsuit issue was a pop culture phenomenon.
“I think it's one of the best magazines ever, with some of the best photographers, writers and editors ever in one building,” said Rick Reilly, who wrote the magazine's popular Backpage column for years. He added: “If it's really dead, it's dying, so to speak.”
In fact, Sports Illustrated has been in trouble for years. The transition to the digital media world was difficult for him and was hampered by mismanagement.
Meredith bought Time Inc., which also owned Sports Illustrated and other media assets, in 2017 for $3 billion. Two years later, the media conglomerate sold Sports Illustrated to Authentic Brands Group, which is primarily a licensing company that acquires the rights to famous brands. for $110 million. It was purchased for the value of the Sports Illustrated name and intellectual property, not because Authentic Brands Group intended to publish a magazine.
Arena Group — which includes Men's Journal, Parade and TheStreet and was formerly known as Maven — quickly struck a 10-year deal with Authentic Brands Group to operate and publish Sports Illustrated. The company paid at least $45 million for the right to do this, while Authentic Brands Group retained the commercial rights for things like a potential Sports Illustrated-branded hotel in Michigan.
In a statement, Authentic Brands Group said it is committed to ensuring that “the Sports Illustrated brand, which includes its editorial 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 are confident someone will,” she said in a statement.
Over the last decade, Sports Illustrated's newsroom has shrunk. The company's last remaining staff photographers – those “illustrated” in Sports Illustrated – were laid off in 2015, and several rounds of layoffs followed. The once weekly magazine is now published monthly. Many of the stories on the site are now written by low-paid contractors.
Despite these changes, the publication's digital audience has continued to grow. According to Comscore, Sports Illustrated attracted more than 50 million visitors in December, doubling viewership compared to four years earlier.
The magazine layoffs are the latest bad news for the publishing industry, whose fortunes have become increasingly dire in recent months. Prestigious publications like the Los Angeles Times and the Washington Post, owned by wealthy billionaires, have reduced their newsrooms in the last year as advertising revenue dried up and attracting new online subscribers proved difficult. Even startups once hailed as the future of the media industry — like BuzzFeed and Vice — have abandoned or sharply scaled back their news-gathering efforts as investors have become disillusioned with digital publishing.
The union that represents Sports Illustrated confirmed that Arena Group is 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 enable it to serve our audiences in the way it has for nearly 70 years.”
It's been a particularly turbulent few months at Sports Illustrated. In August, Manoj Bhargava, the entrepreneur behind 5 Hour Energy Drink, agreed to buy a large stake in Arena Group, raising hopes that he could provide some degree of stability.
But shortly after Mr. Bhargava agreed to buy the shares, Sports Illustrated fell into chaos. Several senior Arena Group executives were forced out of the company, including Chief Executive Officer Ross Levinsohn; its president, Rob Barrett; its Chief Operating Officer, Andrew Kraft; and its general counsel, Julie Fenster.
In November, reports emerged that Sports Illustrated had published product reviews under fake author names that appeared to be generated by artificial intelligence, for which Arena Group blamed a vendor.
“My God, they had AI writers with backstories, robots that they were trying to impersonate,” Mr. Reilly said, before citing renowned Sports Illustrated writers. “This is a place that hired Jim Murray and Dan Jenkins!”
After that the situation got worse. In early January, Arena Group failed to make a $3.75 million payment to Authentic Brands Group, violating its licensing agreement. Days later, Mr. Bhargava resigned as interim chief executive and the company signed an agreement with FTI Consulting to help turn around the business.
Things came to a head on Thursday when Authentic Brands Group sent Arena Group a letter terminating the Sports Illustrated license and triggering an immediate $45 million payment to Authentic Brands Group, according to public filings . On the same day, Arena Group announced that it would cut a third of its workforce.
Mr. Levinsohn — who himself oversaw cuts to Sports Illustrated's newsroom amid industry headwinds — resigned from Arena's board on Friday. He responded to the news of the layoffs on LinkedIn, calling it “one of the most disappointing things I've ever experienced in my professional life.”
A spokesman for Mr. Bhargava, Steve Janisse, said in a statement that the company was in “active negotiations” with Authentic Brands.
“And we’re not the only ones,” Mr. Janisse wrote. “They were also approached by others. Because of this interest, we expect the great institution that is Sports Illustrated will continue, survive and grow.”
In 2020, shares of Arena Group traded as high as $14.20. They traded for under $1 on Friday.