Arena Group Holdings has lost its license to publish Sports Illustrated after failing to make a payment to its licensor, Authentic Brands Group (ABG). In a regulatory filing on Friday, Arena revealed that ABG had terminated their licensing agreement for the iconic sports magazine with immediate effect.
The termination of the agreement follows Arena’s failure to make a $3.75 million quarterly payment to ABG. According to the terms of the agreement, ABG has the right to end the deal if a payment is missed.
In addition to the missed payment to ABG, Arena also disclosed that it missed an interest payment on its debt held by Renew Group Private Limited.
If the agreement is officially terminated, Arena will be required to pay a fee of $45 million to ABG.
Arena stated that it is currently engaged in discussions with ABG regarding the license agreement.
As a direct result of the terminated agreement and challenging macroeconomic conditions, Arena announced on Thursday that it would be laying off over 100 employees, which accounts for approximately one-third of its current workforce. The company cited the need for restructuring due to the financial impact of these challenges.
The layoff is expected to result in restructuring charges of $5 million to $7 million for Arena.
The Sports Illustrated Union has released a statement acknowledging that workers were informed of Arena’s plans to lay off a significant number of union-represented employees.
At the time of writing, no response has been received from an Arena spokesperson regarding this matter.