Shares of Arena Group Holdings Inc. dropped greater than 30% on Friday after the ailing media firm misplaced its license to publish Sports Illustrated and the union for the famed publication stated “possibly all” union-member employees may very well be laid off in consequence.
Arena’s inventory
AREN,
closed Friday’s buying and selling down 33.6% at 84 cents per share. The inventory is down greater than 89% within the final 12 months.
Arena had overseen Sports Illustrated’s publication by way of an association with the leisure and brand-management firm Authentic Brands Group.
But in a regulatory submitting on Friday, Arena stated Authentic had a day earlier nixed that settlement after Arena missed a $3.75 million quarterly cost to Authentic. The termination of that association additionally triggered a $45 million payment, due instantly, that Arena must 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 stated in an announcement 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 assertion 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 didn’t instantly reply to a request for extra details about the variety of staff that may very well be affected.
The layoffs are the newest in a collection of cutbacks lately at Sports Illustrated, which has struggled to achieve traction in an online-media universe and has confronted questions on its editorial requirements beneath Arena’s oversight. In November, the tech-news web site Futurism reported that Sports Illustrated was publishing AI-generated content material beneath phony bylines. Arena, in the meantime, has struggled with debt.
A spokesperson for Arena, which additionally runs The Street and Men’s Journal, declined to supply further details 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 stated in an e-mail.
On Thursday, Arena introduced that it was shedding 100 staff, or roughly one-third of its present workforce. Arena additionally stated it was in talks to mix with Bridge Media Networks early this yr, with a “substantial investment” being a 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 stated Thursday.
Earlier this month, Arena stated it had tapped business-advisory agency FTI Consulting to assist with its turnaround efforts, and that interim Chief Executive Manoj Bhargava had resigned to keep away from potential conflicts of curiosity forward of any potential offers. Arena fired its earlier CEO, Ross Levinsohn, in December.
Source web site: www.marketwatch.com
