Ex-COO of Sports Illustrated publisher sues for $2 million

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Former Sports Illustrated publisher Arena Group Holdings and its chief executive officer, Manoj Bhargava, were sued by a terminated executive who claims he’s owed at least $2 million.

Andrew Kraft, Arena’s former president and chief operating officer, filed suit Monday in federal court in New York. It’s the latest legal dispute stemming from Bhargava’s 2023 takeover of Arena, which acquired the publishing rights to Sports Illustrated in 2019 from its owner, Authentic Brands Group LLC, for $15 million per year plus other royalties.

After being bought by Bhargava, the founder of 5-Hour Energy drinks, Arena missed multiple debt payments and conducted mass layoffs, moves that brought negative publicity to the Sports Illustrated brand. Authentic terminated the licensing agreement in January and sued Arena and Bhargava earlier this month for allegedly failing to pay royalties, infringing its intellectual property and decimating the brand.

Arena announced it was laying off Kraft in January along with Arena’s then-CEO Ross Levinsohn. In his suit, Kraft says he was let go the previous month in violation of company by-laws requiring executives to be terminated either by the CEO or by board resolution. Bhargava, who took over as CEO, hadn’t been formally appointed by the board at the time, according to Kraft.

The terminations of Levinsohn and Kraft were announced the day after Authentic ended its licensing agreement with Arena. Kraft claims Arena was using the negative publicity over the deal’s collapse to suggest he was fired “for cause.” He suggested this was mainly to avoid paying him severance and a bonuses he was owed.

A spokeperson for Arena declined to comment on Kraft’s suit.

Levinsohn filed his own complaint against Arena and Bhargava in January over his December removal.

The case is Kraft v. Arena Group Holdings Inc., 24-cv-2619, US District Court, Southern District of New York (Manhattan).