AYESHA RASCOE, HOST:
For much of its 70-year history, Sports Illustrated was the top of the heap when it came to sports journalism. It was the place every aspiring sportswriter and sports photographer wanted to work. There was a Sports Illustrated for kids, Sports Illustrated for women, and one of the first 24-hour sports news websites. But in recent years, the magazine has been on a decline, and on Friday, its owner announced it will lay off more than 100 employees - most, if not all, of the staff. Washington Post sports and media reporter Ben Strauss joins us now. Welcome to the program.
BEN STRAUSS: Thanks for having me.
RASCOE: These layoffs come because the publisher missed a payment to the owner of the Sports Illustrated brand. What's that about?
STRAUSS: Yeah, Sports Illustrated has a super complicated ownership structure. So there's a company that owns Sports Illustrated called the Authentic Brands Group, and then they sell the publishing license to another company called the Arena Group. And the Arena Group pays the parent company a licensing fee to publish it. And they missed a payment earlier this month. And that is what precipitated the termination of the license. And in response to the termination of the license, the publishing group announced that they are going to lay off the staff. Now, the second part of that is two companies at the, you know, the top of Sports Illustrated are continuing to negotiate what a new license could look like. And so if they are able to reach a new agreement, most of these people will in fact keep their jobs.
RASCOE: So the publisher has to pay about $15 million a year to the brand owner. Is basically the publisher saying they can't make that amount of money - that's too much money for them to be able to make ends meet?
STRAUSS: Correct, correct. So media is a tough business these days. And imagine you're starting every year $15 million in the hole already before you pay a salary, before you publish an article.
RASCOE: I see that the same brand owner, ABG, licensed the Sports Illustrated name to an online casino, and a chain of vacation resorts. Is Sports Illustrated as a brand more profitable than Sports Illustrated as a magazine?
STRAUSS: If you talk to the people who own Sports Illustrated, yes. You know, I talked to the owner of the company, the CEO of this parent company, and they said the Sports Illustrated brand is strong. You know, they said they're making money on these licensing deals. And so if you take that at face value, there would appear to be a business here, they say. However, the brand is the journalism is the magazine. And so how you continue to license a brand or to make money on a brand if there is no publication seems extremely difficult.
RASCOE: We've seen sports journalism, you know, actual journalism decline elsewhere. Obviously all of the media really is in a tough time. But there's all this money going into sports, and it's all over social media. Why is journalism having a hard time finding its audience?
STRAUSS: Yeah. You've seen, you know, really just about every sports media company go through a series of layoffs and sort of emerge smaller than it was 10 years ago, five years ago. Journalism in general is tough to sell these days. Newspapers, magazines have lost all the advertising from their print publications as they've migrated to digital. And those ad dollars are going, you know, to Google and Facebook. So just the economics there is difficult. The TV networks have seen the cable bundle deteriorate. And so those fees that they counted on for decades and decades that that paid for the journalism are in jeopardy. And there is a lot of other content available. Athletes have their own podcasts, you know, teams and leagues have their own media arms. So many dynamics, you know, some that are widespread across media, some that are unique to sports - but there's so many different things that have contributed to this widespread decline of sports journalism.
RASCOE: That's Ben Strauss, sports and media reporter for The Washington Post. Thank you so much for joining us.
STRAUSS: My pleasure. Thanks for having me. Transcript provided by NPR, Copyright NPR.
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