April 23, 2024

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The owner of Sports Illustrated magazine is suing energy drink Mogul after chaos at the magazine

The owner of Sports Illustrated magazine is suing energy drink Mogul after chaos at the magazine

The owner of Sports Illustrated filed a lawsuit Monday against Manoj Bhargava, the energy drink magnate whose foray into the media has been filled with chaos and strife, accusing him of failing to pay millions of dollars for the publishing rights to the popular magazine.

The 51-page lawsuit, filed in the U.S. District Court for the Southern District of New York, says Bhargava and Arena Group, the publisher he controls, are owed $48.75 million in unpaid payments, as well as damages for Sports Illustrated's copyright infringement. And brands.

The lawsuit represents the latest public skirmish between Authentic Brands Group, which owns Sports Illustrated, and Mr. Bhargava, the founder of the energy drink company 5-Hour Energy, whose efforts to take control of Sports Illustrated's parent company have led to a series of lawsuits and turmoil in sports publishing.

Sports Illustrated is run by Minute Media, a New York-based sports media company, which wrested the title from Arena Group last month by striking a new deal with the magazine's owner. After Arena Group laid off dozens of employees in January and threatened to shut down the print edition of Sports Illustrated, Minute Media vowed to hire some of them back and keep the magazine alive.

Authentic Brands Group, a New York-based intellectual property firm that also owns the rights to celebrities such as Shaquille O'Neal and Marilyn Monroe, said in its suit that Mr. Bhargava “repeatedly chose to break the law” in his dealings with Sports Illustrated, intentionally missing payments for the magazine's license and interfering with its new operator. .

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“In less than five months, Bhargava’s new venture not only crashed and burned, but nearly brought SI down with it,” the lawsuit says.

Through a spokesperson, Arena Group and Mr. Bhargava declined to comment on the lawsuit.

In fact, Mr. Bhargava took control of Arena Group, publisher of Sports Illustrated, last year after striking deals to take an ownership stake in the company and buy out its debt. He then orchestrated the ouster of the company's CEO, Ross Levinson, and appointed his own executives, according to the lawsuit.

Relations between Authentic Brands Group and Arena Group quickly deteriorated. Arena Group agreed to pay Authentic Brands Group a $15 million annual fee for a license to publish the magazine. Mr. Bhargava deliberately skipped part of that payment in January, according to the lawsuit, in an attempt to reduce the cost of running the magazine. He also failed to pay Authentic Brands Group's $45 million termination fee when the company revoked Arena's license for the magazine in February and threatened to “go nuclear” in response to demands from the magazine's owner, according to the lawsuit.

After Authentic Brands Group found a new publisher for Sports Illustrated, Minute Media, according to the lawsuit, Arena Group shut down Sports Illustrated's websites and interfered with the orderly transfer of site data to Minute Media.

Additionally, according to the lawsuit, Mr. Bhargava and the Arena Group misused Sports Illustrated's intellectual property, applying its logo to websites affiliated with Mr. Bhargava without permission from Authentic Brands Group. In one case, the lawsuit said, Arena Group published a 5-Hour Energy news release that was labeled a Sports Illustrated editorial, undermining “the value and reputation of SI's brand and business.”

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Mr. Bhargava already faces other lawsuits related to his association with Sports Illustrated. Former Arena Group executives, including Mr. Levinson, sued Mr. Bhargava for withholding severance payments, as well as punitive damages and legal fees.