Days before The Arena Group, Manoj Bhargava’s media company, lost the rights to publish Sports Illustrated, the 5-Hour Energy tycoon sought to taint the venerable publication enough to make its owner, Authentic Brands Group, “cry uncle” and “surrender.”
Authentic, which has owned SI since 2019, made those allegations and many more in a federal lawsuit against Bhargava and Arena on Monday, two weeks after Authentic selected Minute Media to take over as SI’s new publisher. The lawsuit seeks at least $48.75 million, including a $45 million termination fee and a $3.75 million royalty payment. Arena missing that payment in January led Authentic to terminate Arena’s 10-year, $150 million license agreement to publish SI.
“Bhargava behaved more like a gangster than a trusted business partner and good-faith counterparty, threatening to rip up the Licensing Agreement, and essentially burn everything down and destroy the SI brand, unless ABG entered into a new agreement on completely new terms,” Authentic said in the civil complaint, which was filed in U.S. District Court for the Southern District of New York.
Beyond monetary damages, Authentic also requested an injunction to prevent Arena and Bhargava “from continuing to interfere” with SI’s transition to Minute Media and forbid Arena from using SI’s trademarks.
As Front Office Sports first reported last week, Bhargava threatened to erase SI’s archives and force SI.com to go dark, and demanded Minute Media pay him $50 million, according to sources with knowledge of the situation. Bhargava’s “irrational behavior and unfounded demands” ramped up as the transition to Minute Media got underway, according to the lawsuit.
“It became clear to Minute Media that Bhargava did not even comprehend the proposal given his lack of understanding of the media business and related technology,” Authentic said in the complaint. “Instead, Bhargava responded by demanding to be paid a $50 million ransom—a figure that he pulled from thin air and refused to even begin to try to explain. If Minute Media did not agree to pay that ransom, Bhargava threatened to ‘go nuclear,’ suggesting that he was prepared to somehow delete SI’s content archives [among other things].”
An Arena spokesperson declined comment.
As the site transition began last month, Authentic says in the suit, Arena continued to use SI branding and duplicated SI content on Arena-owned Athlon Sports. Arena also allegedly “tried to hijack” SI Fan Nation, a network of about 160 sites that, like the rest of SI, is owned by Authentic.
“In less than five months, Bhargava’s new venture not only crashed and burned, but almost took SI down along with it,” Authentic said in the pleading.
