Title: Sports Illustrated Owner Sues Former Publisher for $48 Million Alleging Payment Default

In a legal battle that has shaken the publishing industry, Authentic Brands Group, the owner of Sports Illustrated, filed a lawsuit against the magazine's former publisher for $48 million. The lawsuit accuses the company of intentionally halting payment as a pretext for renegotiating a new licensing deal.

Manhattan federal court received the lawsuit which claims that Manoj Bhargava, founder of 5-Hour Energy drink and largest shareholder of Arena, "behaved more like a gangster than a trusted business partner." Bhargava reportedly reneged on a $3.75 million quarterly license fee payment to Authentic Brands in January.

Allegedly, Bhargava threatened to "go nuclear" by sabotaging Sports Illustrated and holding it "hostage." In response, Authentic Brands revoked Arena's license, resulting in the layoff of the entire staff, including union members. Furthermore, Authentic Brands enforced a clause in the contract that required Bhargava's company to pay a termination fee of $45 million.

While Arena continued to publish Sports Illustrated during the search for a new licensing deal, Authentic Brands sold the licensing rights to Minute Media, the owners of Derek Jeter-founded Players' Tribune, last month.

The lawsuit claims that Bhargava sought to manipulate the situation as a means of forcing Authentic Brands to accept his unreasonable demands. Authentic Brands accuses Arena of acting with "lawlessness" by refusing to transfer important SI-related assets, such as subscriber data and editorial content, to Minute Media.

The Arena Group, which acquired publishing rights from Authentic in 2019 for a minimum of 10 years, has faced numerous challenges in its stewardship of Sports Illustrated. The magazine was originally acquired by Meredith Publishing in 2018 as part of the Time Inc. purchase. However, Meredith subsequently sold Sports Illustrated's intellectual property to Authentic Brands for $110 million.

Over the years, Sports Illustrated underwent several changes in its publication frequency, shifting from a weekly to a biweekly format in 2018, and eventually becoming a monthly in 2020. Despite these changes, Minute Media has expressed its commitment to continue the print edition of Sports Illustrated and expand its global operations.

Attorney Robbie Kaplan, representing Authentic Brands Group, stated, "While the detailed allegations in our complaint speak for themselves, we are proud to be representing Authentic Brands Group in this lawsuit."

The Post has reached out to Arena Group for comment regarding the lawsuit. The legal battle between Authentic Brands and Arena Group is poised to have significant implications for the future of Sports Illustrated and the publishing industry as a whole.