Two weeks ago, the announcement that Minute Media reached a deal with Authentic Brands Group to become the new publisher of Sports Illustrated was met with a collective sigh of relief by many, including employees and contractors of the legendary sports brand.
The reality is that, behind the scenes, things sound as ugly as ever.
Front Office Sports’ A.J. Perez fired off a damning report Tuesday night that dug into the dramatic machinations that have taken place since that announcement involving former SI publisher The Arena Group and Manoj Bhargava, the “energy drink tycoon” in charge of it.
Eagle-eyed readers might have noticed this week that while The Big Lead sits relatively dormant, its editors and writers have been populating SI’s website with bylines that read “Special to SI.com.” As Perez notes, that’s because SI’s writers still work for Arena while TBL is owned by Minute Media.
But that’s the least of it, per Perez.
Three sources with direct knowledge tell Front Office Sports that Bhargava demanded Minute Media pay at least $50 million for SI Fan Nation and threatened to destroy SI’s archives in a meeting with Minute. They also say that Arena tried to take over its social media accounts. And according to an email reviewed by FOS, Arena turned off email and Google Workspace access for SI employees last week over what it claimed was “potential unauthorized extraction of data and IP.”
On top of all this, Ross Levinsohn, a former Arena executive, recently filed a suit detailing Bhargava’s thirst for taking over the company. The suit broadly claims that Bhargava used a minority holding in Arena to take over the company and, by extension, SI as part of a plot to consolidate his media holdings and secure free advertising for his businesses, which include the 5-Hour Energy brand. More specifically, it accuses him of deliberately breaking contracts as part of a convoluted union-busting plan and uses the word “illegal” or variants nearly two dozen times.
Levinsohn’s lawsuit reportedly alleges that one of the first things Bhargava did when he assumed control of Arena was request SI swimsuit models tour his company’s offices and wanted to create a commission-based sales arrangement for SI models to sell subscriptions to his products at SI-branded events.
The lawsuit also alleges that Levinsohn was fired as CEO for not aligning with Bhargava’s vision, which included “a calculated plan to kill the SI Union.”
The suit details how Bhargava assumed control over Arena despite only having a minority stake in the company, eventually brute-forcing his way into a leadership role. In an infamous 90-minute town hall on Dec. 7, he told staff that “PowerPoints are illegal” and that everyone needed to “stop doing dumb stuff” before reportedly saying “Everyone is replaceable.”
Levinsohn claims that while Arena had enough money in reserves to make a $3.75 million January payment to Authentic, Bhargava decided not to pay, which Levinsohn claims was part of Bhargava’s plan to place Arena in bankruptcy. The suit also alleges this was part of a plan to fire all employees who were part of the SI Union so that they could be hired back as independent contractors, costing the company much less. Arena did begin laying off contractors and writers in January.
After the relationship between Authentic and Arena deteriorated and Minute Media cut their deal to take over SI, things did not go well between the new publisher and the old one. Bhargava reportedly played hardball with Fan Nation’s assets, demanding “at least $50 million” for them, while Bhargava’s “henchmen tried to sabotage” the transition of the site archives and domain, which led to website crashes and social media account drama.
At the heart of the remaining fight between Arena and Minute appears to be FanNation, which is made up of approximately 160 sites and is the daily content engine at the heart of SI’s current editorial efforts. Both sides apparently claim to have ownership over the FanNation intellectual property and the final ruling does not yet appear to have been determined.
Perez notes that both Arena and Minute have met with contractors in an attempt to bring them on. He also notes that since many of SI’s employees remain in the employ of Arena, it could be a while before they come over to Minute Media, if they do at all.
As for how all of this impacts higher-profile SI talent like Jimmy Traina, Pat Forde, and Chris Mannix, it’s hard to know until some more dust settles. We suppose the same can be said about a lot of aspects of this situation.
[FOS]
