HSW Defends Ex-Publisher of Sports Illustrated With Countersuit Alleging ‘Multistep Corporate Heist’

June 11. 2024

Harris St. Laurent & Wechsler has filed a countersuit on behalf of The Arena Group Holdings Inc., alleging it was pushed out of its role operating Sports Illustrated through oppressive and illegal business tactics. As detailed in stories from Business Insider and Law360, the countercomplaint outlines a “multistep corporate heist” allegedly designed to strip Arena, a major media and technology company, of its publishing license, trade secrets and publisher relationships.

HSW represents Arena, which published Sports Illustrated until January 2024, when it missed a $3.75 million quarterly royalty fee payment to brand management company Authentic Brands Group LLC (ABG). In its countersuit over the payment, Arena alleges ABG orchestrated its financial woes while secretly shopping the publishing license to competitor Minute Media Inc. — a third-party defendant in the countersuit.

The countercomplaint claims ABG undermined Arena’s attempts to modernize the business and increase profits, including its plans to discontinue the Sports Illustrated print magazine as it struggled with a shrinking subscriber base and ballooning costs. As a result, Arena had to lay off staff and struggled to meet its royalty payments, triggering a $45 million termination fee. Minute Media has since obtained the Sports Illustrated publishing license.

Arena’s countersuit accuses ABG of conspiring with Minute Media to steal its proprietary code technology and trade secrets related to the internet platform Arena developed. Meanwhile, ABG allegedly reassured Arena that it would renegotiate the licensing deal. 

The June 7 filing in the U.S. District Court for the Southern District of New York seeks at least $200 million in damages and an injunction blocking ABG and Minute Media from using Arena’s proprietary and confidential trade secret information, tortiously interfering with its business and contractual relationships or otherwise competing unfairly.

HSW partners Yonaton Aronoff and Megan Dubatowka and associate Juannell Riley are representing Arena in the litigation.