While The Arena Group owner Manoj Bhargava and his holding company Simplify Investments have “fielded much criticism” for losing Sports Illustrated, the “decision was highly calculated,” according to sources cited by Mark Stenberg of ADWEEK. Sources said that SI generated between $70M and $85M in revenue in 2023, with “most of that coming from the print product.” But source said that it was “roundly understood that its core business has not been profitable for years.” The $15M annual licensing payment it had to make to Authentic Brands Group was an “additional burden.” As a result, SI “acted as a drag on the commercial health of The Arena Group.” Sources said that while Bhargava was "prepared to lose Sports Illustrated, he wanted to retain it.” The decision to not pay the $3.75M licensing fee was a "gambit that, if it worked, would have allowed Arena Group to reduce one of Sports Illustrated’s most significant expenses, bringing it closer to profitability.” Instead, Arena Group has “shed an unprofitable asset, strengthening the commercial health of its broader portfolio. " Sources said that without the publisher, Bhargava can “still use the remaining properties to market the products of his other businesses” -- a "key rationale for the acquisition -- and the divestiture better positions The Arena Group to operate at a profit" (ADWEEK, 3/25).
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