Sports Illustrated lays off most of its staff

AI sports illustrated, using the writing of its great legacy, with the names and results of today's games? As long as everyone was getting a taste - I wouldn't mind.

 

Coverage of this has been very confusing. In part because the current licensing agreement is unusual and opaque. It does seem clear that the Arena Group is not going to pay the licensing fee of 3.75 million dollars.

But maybe you can answer a couple of questions.

Does Arena license both the website and the magazine? Is it possible the print magazine is closing while the website continues to operate? If the football writers are traveling this weekend I would assume it would be for the website because given the early deadlines of the magazine it might be baseball season before the stories appeared.

Were employees given notices that they would be laid off in 90 days or are they being laid off immediately. In some cases federal law requires 90 day notice be given. If 90 day notices were given then there is time for ABG and Arena to negotiate a new deal or ABG to find someone else to run the magazine.

Whatever the circumstances are good luck.

 

Some not-all-bad news for you, at least.

Keep plugging away.

 

Arena Holdings is the company licensing SI. I lifted this from the latest 10-Q.

"As a result, management determined there is substantial doubt about our ability to continue as a going concern for a one-year period following the financial statement issuance date, unless we are able to close the Business Combination by December 31, 2023 or extend the date at which such a default would occur."

In the first three quarters of 2023 Arena had a negative cash flow of 21 million dollars. The company is rapidly going through cash. Arena is paying ABG 3.75 million a quarter in licensing fees. So even if ABG agreed to renegotiate the license the magazine for one dollar a quarter to Arena the company would still be burning off cash.

The company had been selling stock to raise cash but in the last year the share price has gone from $7.86 a share to .84 cents. The market cap of the company is only 20 million dollars so the equity markets seem to be closed. Given the large amounts of money the company is losing I am not sure who wants to lend them money.

I do not know how many of the problems of the company can be attributed to SI or to its other properties. Maybe SI is kind of muddling along and other company properties are dragging the company under. But I would be very surprised if ABG continues the relationship with Arena. The future of Arena is to uncertain. Does that mean ABG publishes SI itself or finds a new lessee. I don't know?.

But if I worked at SI I would start job hunting.

 

I understand that the company has other substantial interests in other publishing ventures. I checked the 2022 10-K and the company does not break out financial information by segment so I can[t determine how each part of the company is doing.

But my point remains. Arena is a mess. SI either needs to move to new management ASAP if it indeed makes enough money to sustain itself.

 

I received my daily Dan Gatland email from SI today.

 

the shining hilarious term in all of this is "the people team."

cousin, I guess, of "the human fund."

 

Soylent Green is people!

 

The way newspaper deadlines work these days, never say never.