Sports Illustrated Sues Indian American Billionaire Manoj Bhargava for $49 Million for Missed Payments, Copyright Infringement

Sports Illustrated’s owner, Authentic Brands Group, has filed a lawsuit against 5-Hour Energy founder Manoj Bhargava, accusing him of failing to pay millions of dollars for the rights to publish the magazine. The 51-page lawsuit, filed on April 1 in U.S. District Court for the Southern District of New York, says Bhargava and Arena Group, the publisher he controls, “owe $48.75 million in missed payments, as well as damages for infringing on Sports Illustrated’s copyrights and trademarks,” The New York Times reported. 

The Indian American billionaire was named interim CEO of the Arena Group last December, “after striking deals to obtain an ownership stake in the company and buy up its debt,” The Times report said, citing the lawsuit. He then “orchestrated the ouster of the company’s chief executive, Ross Levinsohn, and installed his own executives,” the lawsuit added. 

Before that in August 2023, Bhargava bought a majority stake in The Arena Group, home to more than 265 brands, including Sports Illustrated, TheStreet, Parade Media, Men’s Journal, and HubPages. Reporting on the sale, Forbes noted that Bhargava has “experience in media and a track record for strong branding, and has made his fortune selling the popular caffeine brand.”

He defaulted on a multi-year deal to publish the sports magazine and its website, the lawsuit claimed, accusing him of “going nuclear” by holding the magazine “hostage,” The Business Insider said, citing the lawsuit. He threatened to shut down its websites, steal its content and subscriber data, and infringe its trademarks and copyrights, which he did, the lawsuit alleges “to force Authentic Brands back to the negotiating table after their licensing deal fell apart.”

As relations between Authentic Brands Group and Arena Group began to deteriorate, Arena Group “agreed to pay a $15 million annual fee to Authentic Brands Group for a license to publish the magazine,” the lawsuit said, according to The Times. Bhargava “deliberately skipped an installment of that payment in January,” the lawsuit added, “in an attempt to lower the cost of operating the magazine.” He also “failed to pay Authentic Brands Group a $45 million termination fee when the company revoked Arena’s license to the magazine in February,” the lawsuit said.

After Authentic Brands Group found a new publisher — Minute Media — for Sports Illustrated, “Arena Group shut down websites affiliated with the magazine, and interfered with the orderly transfer of the site’s data,” the lawsuit said. The  New York-based sports-media company “wrested the title away from Arena Group last month by striking a new deal with the magazine’s owner,” The Times reported. “After Arena Group laid off scores of employees in January and threatened to discontinue Sports Illustrated’s print edition, Minute Media pledged to hire some of them back and keep the magazine alive,” the report added. 

Additionally, Bhargava and Arena Group “misused Sports Illustrated’s intellectual property, applying its logo to sites affiliated with him without permission from Authentic Brands Group,” the lawsuit said.

The New York Times noted that “the lawsuit represents the latest public skirmish between Authentic Brands Group, and Bhargava, whose effort to take control of Sports Illustrated’s parent company has resulted in a series of lawsuits and turmoil at the sports publication.”

Bhargava is already facing other lawsuits related to his association with Sports Illustrated. Former Arena Group executives, including CEO Ross Levinsohn, are suing him for withheld severance payments, as well as punitive damages and legal fees.

His tax issues have also been thrust into the spotlight. Senator Ron Wyden sent a letter to Swiss bank Pictet in March “seeking information about an array of accounts that are reportedly linked to Bhargava,” CNBC reported at the time. “The letter, which seeks information as part of an ongoing committee investigation, did not name Bhargava, instead referring to him as Person 1,” the report said. 

Born in Lucknow, Bhargava moved with his family to the U.S. as a teenager, settling in a poor Philadelphia neighborhood, The Wall Street Journal said in a November 2015 profile. He attended the prestigious Hill School, before enrolling at Princeton. But he never earned a college degree. He dropped out and, after holding a string of odd jobs, returned to India to become a monk. This is where his “real education began,” he told The Wall Street Journal. 

After more than a decade at the monastery, he moved back permanently to the U.S. He worked several odd jobs ranging from a taxi driver to a printing press operator. It was in 1990 that he would start his first company, a plastics company, that he built and sold to a private equity firm. 

In 2004, he was at a trade show and came across an energy drink. He dreamed of an energy drink without sugar, unknown stimulants, and with fewer fluid ounces. Out of his planning, he created a small, 2.49-ounce bottle, that provided 5 hours of energy. “Everyone asks, how did you do that,” he told The Journal. “I tell them, we weren’t that smart. We just didn’t do dumb stuff… and that pretty much differentiated us from all other corporations.”