The owner of Sports Illustrated sued the magazine’s former publisher for $48 million on Monday, alleging that the company stopped paying its bills as an excuse to negotiate a new licensing deal.
A lawsuit filed by Authentic Brands Group in Manhattan federal court alleges that Manoj Bhargava, founder of 5 Hour Energy Drinks and Arena’s largest shareholder, “behaved more like a gangster than a trusted business partner.” “I did it.”
In January, Mr. Bhargava canceled quarterly license payments of $3.75 million to Authentic Brands, a New York-based intellectual property company that owns the rights to celebrities such as Marilyn Monroe and Shaquille O’Neal.
Bhargava, who paid $50 million in cash for a 65% stake in Arena last year, threatened to “sabotage” SI and “nuclearize” it, according to the complaint.[ing] [it] hostage. ”
As a result, Authentic Brands has revoked Arena’s license. The arena responded by firing its entire staff, including union members.
Authentic Brands then invoked a clause in its contract with Arena, demanding that Mr. Bhargava’s company pay a $45 million termination fee. Arena continued publishing for this storied brand while seeking a new contract.
Authentic sold the licensing rights last month to Minute Media, owner of The Players Tribune, which was founded by Derek Jeter.
In its lawsuit, Authentic Brands accused Bhargava of attempting to “weaponize his obstinacy as a means of intimidation and coercion.” [the company] It’s about capitulating to a series of outrageous demands. ”
As the Post reported, Bhargava’s Bridge Media Networks also owns a 24/7 network called Sports News Highlights and wanted to rebrand the channel after SI.
Authentic CEO Jamie Salter recently told The Washington Post that when Bhargava asked for a lower license fee, he said: “I told him to stop.”
According to the lawsuit filed Monday, Arena engaged in “lawless conduct” by refusing to transfer SI-related licensed assets, including subscriber data and all editorial and other content, to Minute Media. It is said that
Arena was also accused of continuing to use the SI trademark despite losing its license.
“While the detailed allegations in our complaint speak for themselves, we are proud to represent Authentic Brands Group in this case,” said attorney Robbie Kaplan. told the Post.
The Post has reached out to Arena Group for comment.
Arena Group acquired at least 10 years of publishing rights from Authentic in 2019.
Since then, the group’s control of Sports Illustrated has been fraught with hurdles.
In December, the magazine fired CEO Ross Levinson after the magazine sparked public backlash over its alleged use of AI-generated articles.
Sports Illustrated was acquired by Meredith Publishing in 2018 as part of the acquisition of Time Inc., which founded the magazine in 1954.
Less than a year later, Meredith sold the magazine’s intellectual property to Authentic for $110 million.
Sports Illustrated used to be a weekly magazine, but in 2018 it was reduced to a biweekly magazine and became a monthly magazine in 2020.
Minute Media announced it will continue the print edition of SI and expand the magazine’s global operations.
