The Arena Group “never explained why it stopped paying to publish Sports Illustrated,” but interviews with shareholders and current and former employees suggest that Arena "missed the licensing payment by choice, not because it didn’t have the money to make it," according to Kevin Dugan of N.Y. MAGAZINE. The company “had about” $10M in cash in December, enough to “pay its debts, its licensing fees, and make payroll.” Public documents and interviews with other employees show Arena Group “wasn’t running out of money, and the missed payment occurred during the football and holiday season, typically when its revenues were highest.” Among Arena Group's large recurring expenses were its quarterly licensing payments and a $2.8M debt payment -- together amounting to about $6.5M at the end of December. Arena Group met its obligations the previous quarter, when it had less than $8M in cash on its books, public filings show. The company "typically got cash payments on a monthly basis" and had a line of credit -- so there would have been "no holdup on accessing that cash." The roots of the debacle appear to go back to the summer, when Arena Group’s management "started looking for an investor who could inject cash into the company" (N.Y. MAGAZINE, 1/31).
HAVE A SAY: In Washington, Ben Strauss cited sources as saying the publisher of SI “called for the removal of a story about transgender boxing from an upcoming issue of the print magazine.” The story, reported and written by Chris Mannix, was “intended to be part of the March edition of the magazine.” But on Wednesday, just days before the issue was scheduled to be printed, Arena Group exec Orestes Baez told top editors “not to include it.” Multiple SI staffers said that they had “never seen a story removed in such a manner.” Baez's spokesman Steve Janisse said that the story was removed from the print magazine because “it was no longer newsy, and the outlet was still planning to publish the story online.” The apparent “meddling in the editorial process by the business side of the outlet is the latest challenge to morale at SI,” after mass layoff notices were sent to nearly the entire staff last month, amid an ongoing dispute over millions of dollars in licensing fees between the outlet’s owner and publisher. The story in question was an “examination of USA Boxing’s new transgender policy that was announced around New Year’s Eve and the backlash it has received from various sides of the issue” (WASHINGTON POST, 2/1).
