Five years ago, Sports Authority signed a sponsorship deal with their hometown major league baseball team, the Colorado Rockies. They’d become the team’s “exclusive sporting goods retailer,” and the team would put ads for them in the stadium, on the backs of tickets, and in stadium programs. These ads have stayed up since Sports Authority filed for bankruptcy, and the team wants the retailer to pay up for the two and a half months that the ads have remained up.
The question is: does the bankrupt version of Sports Authority that’s still in business have a sponsorship deal with the Rockies? In a recent court filing [PDF], the team’s lawyers argue that the sponsorship deal continues to benefit Sports Authority, a retailer that plans to close all of its stores by the end of August, and that no longer honors the coupons printed on the backs of Rockies tickets.
Sports Authority wants to end its sponsorship agreements retroactively at the beginning of June, and pay the teams and venues when they get around to it. Instead, the Rockies have filed a motion asking to have the sponsorship fees (around $350,000) considered an administrative fee during the bankruptcy, since the team never stopped promoting Sports Authority.
The Rockies and their owners, the filing argues, “have fulfilled their obligations under the Sponsorship Agreement and provided valuable services to Debtor’s bankruptcy estate, including promotional and marketing related services for Debtor while Debtor seeks to sell off its merchandise though the liquidating agent appointed by this Court.”
Again: the stores are in liquidation, and the coupons are no good, though the Rockies do plan to honor the $10 off $50 purchase deal in their stadium gift shop. Yet the team argues that keeping the sponsorship deal in place and promoting the stores would have been important if Sports Authority had stayed in business, and getting their name out there still promotes the going-out-of-business sales.
Instead of the last installments of a contract that the company wants to get out of, the team wants the bankruptcy court to consider the sponsorship payments an administrative expense that’s necessary for the company formerly known as Sports Authority to keep going.
There will be a hearing on all of the contracts that Sports Authority wants two weeks from Tuesday, on June 28.
Colorado Rockies try to collect $350,000 owed by bankrupt Sports Authority [Denver Post]
by Laura Northrup via Consumerist
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