The ousted CEO of Arena Group, which lost its license to publish Sports Illustrated last week, claims in a new lawsuit that his former employer owes him more than $40 million after he was fired for attempting to stop a major investor from violating laws as he tried to take over the company.
Ross Levinsohn was canned by Arena Group in December after the storied publication was embarrassed in a scandal that saw it post AI-generated content credited to fake authors on its website — but he claims there was more to the firing, alleging it was engineered by investor Manoj Bhargava, the mogul behind 5-Hour Energy drink.
The flap also took down Arena COO Andrew Kraft and Rob Barrett, president of the media for the struggling organization, which still publishes TheStreet and Parade. Last week, the publishing rights for SI were snapped up by Minute Media.
Levinsohn, who was also booted from his job as publisher of the Los Angeles Times in 2018 even after he was cleared in an investigation into sexual harassment, filed his claim in Los Angeles Superior Court, charging Arena Group with whistleblower retaliation, wrongful termination, breach of contract, negligence and more.
He claims he still hasn’t been told why he was fired and hasn’t been paid the severance he’s owed, according to Business Insider, which first reported the suit.
Levinsohn blamed his firing and the twists in Arena’s fate on Bhargava, who dropped $100 million into Arena Group last year, then orchestrated the executive ousters just weeks later.
He calls Bhargava “a wolf in sheep’s clothing” in the lawsuit.
The suit claims that as CEO, Levinsohn “attempted to thwart Bhargava’s illegal misconduct, overt self-dealing and systematic destruction of shareholder value,” and got shown the door in response.
Among the transgressions the suit alleges: Bhargava attempted to force Arena to name him “the largest shareholder in Sports Illustrated,” which was false because the company only licensed the brand and a board member representing Bhargava threated to fire SI’s “entire union,” in violation of US labor laws.
He also accused Bhargava of an effort to breach the agreement Arena had with SI, “in what would prove a disastrous attempt to renegotiate the deal.”
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In addition, the suit claims Bhargava directed Arena not to pay interest on its debt, which he controls, and that the investor attempted to promote his other companies, including Bridge Media and 5-Hour Energy, across Arena Group properties without paying, including pressing Sports Illustrated swimsuit models to pitch the energy drink and wear jewelry from another one of this companies.
Bhargava has previously said that Arena Group’s financial condition was worse than he realized and that he had to fire Levinsohn and the other execs after he learned he needed to invest more money in Arena to right the ship, Business Insider said. He put another $12 million into the company in February following layoffs in January.
That counters the “five months of due diligence,” Levinsohn claims in the suit that Bhargava put in before investing.
A spokesman for Bhargava and the Arena Group, Steve Janisse, said he couldn’t comment to Business Insider. The company did not immediately respond to a request for comment from TheWrap.