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Shares of Arena Group Holdings Inc. dropped more than 30% on Friday after the ailing media company lost its license to publish Sports Illustrated and the union for the famed publication said “possibly all” union-member staff could be laid off as a result.
Arena’s stock
AREN,
closed Friday’s trading down 33.6% at 84 cents per share. The stock is down more than 89% in the last 12 months.
Arena had overseen Sports Illustrated’s publication via an arrangement with the entertainment and brand-management company Authentic Brands Group.
But in a regulatory filing on Friday, Arena said Authentic had a day earlier nixed that agreement after Arena missed a $3.75 million quarterly payment to Authentic. The termination of that arrangement also triggered a $45 million fee, due immediately, that Arena would have to pay to ABG.
“Earlier today the workers of Sports Illustrated were notified that The Arena Group is planning to lay off a significant number, possibly all, of the Guild-represented workers at SI, a result of Authentic Brands Group (ABG) revoking Arena’s license to publish SI,” the NewsGuild of New York labor union said in a statement Friday.
“This is another difficult day in what has been a difficult four years for Sports Illustrated under Arena Group (previously The Maven) stewardship,” the statement continued. “We are calling on ABG to ensure the continued publication of SI and allow it to serve our audience in the way it has for nearly 70 years.”
The union did not immediately respond to a request for more information about the number of employees that could be affected.
The layoffs are the latest in a series of cutbacks in recent years at Sports Illustrated, which has struggled to gain traction in an online-media universe and has faced questions about its editorial standards under Arena’s oversight. In November, the tech-news site Futurism reported that Sports Illustrated was publishing AI-generated content under phony bylines. Arena, meanwhile, has struggled with debt.
A spokesperson for Arena, which also runs The Street and Men’s Journal, declined to provide additional information about the job cuts.
“The Arena Group is actively engaged in negotiations with Authentic concerning the Sports Illustrated license and brand, with plans to sustain our commitment to delivering quality content throughout the ongoing discussions,” the spokesperson said in an email.
On Thursday, Arena announced that it was laying off 100 employees, or roughly one-third of its current workforce. Arena also said it was in talks to combine with Bridge Media Networks early this year, with a “substantial investment” being part of the deal.
“The company, which has substantial debt and recently missed payments, is completing these cost-cutting measures to initiate a transformative shift towards a streamlined business model,” Arena said Thursday.
Earlier this month, Arena said it had tapped business-advisory firm FTI Consulting to help with its turnaround efforts, and that interim Chief Executive Manoj Bhargava had resigned to avoid potential conflicts of interest ahead of any possible deals. Arena fired its previous CEO, Ross Levinsohn, in December.
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