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ACR HDMI connected to LG ARC input#2 Apple TV HDMI connected to LG input #1. 
LG sound setting set to ARC output setting. 
app setup won’t complete TV setup. 

Start from scratch. Disconnect everything from the TV. Unplug the Arc and TV from power for a couple of minutes. Plug the Arc and TV back into power but keep everything disconnected including the Apple TV. Make sure Simplink (CEC) is enabled in your TV settings. Then run the TV Setup process in the Sonos app and connect the Arc to the TV’s HDMI ARC port when the app instructs you to. Once the Arc is connected successfully, connect the Apple TV to the TV.