Arena Group says ABG to terminate Sports Illustrated licensing agreement

In a regulatory filing, Arena Group stated: “As previously reported, on January 2, 2024, The Arena Group Holdings, Inc. failed to make a quarterly payment due to ABG-SI LLC, pursuant to the Licensing Agreement, dated June 14, 2019, by and between the company and ABG, of approximately $3,750,000. On January 18, 2024, ABG notified the company of its intention to terminate the Licensing Agreement, effective immediately, in accordance with its rights under the Licensing Agreement. Upon such termination, a fee of $45M became immediately due and payable by the company to ABG pursuant to the terms and conditions of the Licensing Agreement. In addition, upon termination of the Licensing Agreement, any outstanding and unvested warrants to purchase shares of the company’s common stock issued to ABG in connection with the Licensing Agreement became immediately vested and exercisable. The company is engaging in continuing discussions with ABG regarding the Licensing Agreement. The Licensing Agreement previously provided the company with the exclusive right and license in the United States, Canada, Mexico, United Kingdom, Republic of Ireland, Australia, and New Zealand to operate the Sports Illustrated media business in the English and Spanish languages, including to (i) operate the digital and print editions of Sports Illustrated, including all special interest issues and the swimsuit issue, and Sports Illustrated for Kids, (ii) develop new digital media channels under the Sports Illustrated brands, and (iii) operate certain related businesses, including without limitation, certain Sports Illustrated events, special interest publications, video channels, bookazines, and the licensing and/or syndication of certain products and content under the Sports Illustrated brand. The initial term of the Licensing Agreement extended through December 31, 2029, subject to each party’s termination rights. The company had the option, subject to certain conditions, to renew the term of the Licensing Agreement for nine consecutive renewal terms of 10 years each, for a total of 100 years. The Licensing Agreement provided that the company would pay to ABG annual royalties in respect of each year of the Term based on gross revenues with guaranteed minimum annual amounts. ABG agreed to pay to the company a share of revenues relating to certain Sports Illustrated business lines not licensed to the company, such as commerce.”