The former publisher of Sports Illustrated has filed a $200 million legal counterpunch against the magazine’s new publisher and the owner of its intellectual property.
In late 2023, the Arena Group lost the rights to publish SI, its best-known brand, after 5-Hour Energy creator Manoj Bhargava took over Arena and missed a licensing payment to Authentic Brands Group. ABG awarded the publishing license to Minute Media and sued Bhargava for $49 million, accusing him of acting like a “gangster” in their negotiations.
On Friday, Bhargava and his company hit back — and they’re seeking $200 million for what they claim was a plot by ABG and Minute Media to string the Arena Group along while making copies of its websites and laying the groundwork to poach its employees and biggest spenders.
“ABG deceived Arena by promising to work with Arena in good faith to renegotiate Arena’s license so as to allow Arena to continue to operate Sports Illustrated,” the complaint says. “Privately, ABG and Minute had been partnered for weeks, conspiring to steal Arena’s code and publisher relationships.”
The counter-suit also took aim at CVC Capital Partners and BlackRock, investors in ABG, although they weren’t named as parties to the lawsuit. In the complaint and in a statement, Steve Janisse, a spokesman for Arena and Bhargava, said it was unethical for them to have assisted in what it characterized as ABG’s sham negotiations.
“It’s amazing that CVC Capital and BlackRock would condone this type of corporate behavior,” said Janisse. “To be honest, we’re surprised they aren’t calling for a change of leadership at ABG.” An executive at CVC didn’t immediately respond to emails and a representative for BlackRock declined to comment.
Bhargava has a history of aggressive legal action. A 2012 Forbes profile noted that he had already filed more than 90 lawsuits. Bhargava, who made his billions selling 5-Hour Energy Drink, showed the Forbes reporter a “cemetery” bookcase in his office, lined with energy shot bottles from competitors his company had sued or legally bullied out of the market, calling them the “gravestones” of his vanquished rivals.
Bhargava’s lawsuit adds to the morass of legal actions that have formed around Arena Group. In early April, ABG sued Arena and Bhargava for the missed licensing payment and a $45 million termination fee.
Arena, whose stock trades for less than half of what it did at the start of 2024, included that $45 million fee in a loss of nearly $91 million that it recorded in connection with the loss of the SI brand last quarter.
Ross Levinsohn, the former Arena CEO who was fired when Bhargava took over, has also sued Arena, claiming he was retaliated against. Shortly thereafter, Levinsohn, who became CEO of Arena in 2020 before being fired in 2023, became the target of a lawsuit filed by Arena’s founders, who claim he mounted a “fraudulent coup” to enrich himself at the expense of Arena and other shareholders, according to Front Office Sports.
ABG and Minute Media didn’t immediately reply to comment requests.
Source link
lol
