Shares of The Arena Group (NYSE:AREN) plunged 30% to hit a new 52-week low amid reports that it intends to lay off the editorial staff of Sports Illustrated after it failed to make a licensing payment to the brand’s owner, Authentic Brands Group.
In an X post on Friday, The NewsGuild of New York said SI workers were notified Friday that The Arena Group was “planning to lay off a significant number, possibly all of its Guild-represented workers at SI, as a result of Authentic Brands Group revoking Arena’s license to publish SI.”
Earlier this month, Arena disclosed that it had failed to make a quarterly payment of approximately $3.75M to Authentic Brands Group, or ABG, and a $2.8M interest payment to Renew Group.
Arena said in an SEC filing on Thursday that it was notified on Jan. 18 that ABG had terminated its licensing agreement to operate the SI media business, which immediately triggered a $45M termination fee payable to ABG.
Arena added that as a result of the termination and “challenging macroeconomic conditions,” it would be laying off around 30% of its staff. The company expects to execute most of its cost cutting plan and recognize associated charges of approximately $5M to $7M in the first two quarters of 2024.
In addition to SI, Arena publishes over a dozen other websites and periodicals including Parade, Men’s Journal and TheStreet.
Last month, Arena Group (AREN) terminated the employment of CEO Ross Levinsohn and named 5-Hour Energy Drink founder Manoj Bhargava as interim CEO. Bhargava had agreed to buy a majority stake in Arena in August.
Arena plunges 30% to new 52-week low amid Sports Illustrated layoffs
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