Authentic Brands Group, owner of Sports Illustrated, is suing MeidasTouch parent company Arena Group — and its controversial part owner, Manoj Bhargava — for $48.75 million plus damages for copyright and trademark infringements.
The 51-page lawsuit, filed in U.S. District Court for the Southern District of New York on Monday, alleges Bhargava “repeatedly ‘opted for lawlessness’ in his dealings with Sports Illustrated, deliberately missing payments to license the magazine and interfering with its new operator,’” The New York Times reports. The lawsuit claims that “In less than five months, Bhargava’s new venture not only crashed and burned, but almost took SI down along with it.”
According to the lawsuit, Bhargava — the inventor of 5-Hour Energy — assumed control of Arena Group, Sports Illustrated‘s publisher, after buying up its debt and obtaining an ownership stake in the company. The lawsuit claims that Bhargava then ousted Arena Group’s former CEO, Ross Levinsohn, and installed his own loyalists to run the company. Arena Group had a preexisting deal with Authentic Brands Group to pay a $15 million annual fee for the license to publish Sports Illustrated. Bhargava allegedly skipped the payment this year and refused to pay a $45 million termination fee to Authentic Brands Group after it revoked Arena Group’s license for the magazine. The lawsuit says Bhargava threatened to “go nuclear” in response to Authentic Brands Group’s demands.
In March, Levinsohn filed his own suit against Bhargava, accusing him of “deliberately breaking contracts as part of a convoluted union-busting plan.” Levinsohn’s suit allegesthat one of Bhargava’s first moves after assuming control of Arena was to request the Sports Illustrated swimsuit models tour his offices.
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