Sports Authority, a currently bankrupt and soon to be defunct company, has filed a motion in court attempting to get out of nine sponsorship agreements. Those include agreements with the Colorado Rockies, Denver Broncos, LA Galaxy, Los Angeles Dodgers, Milwaukee Brewers, Minnesota Vikings, New York Giants, New York Jets and the Philadelphia Eagles
“The Englewood-based sporting goods retailer is in the process of liquidating and late Friday asked a federal bankruptcy court to let it reject — court language for “get out of” — the nine agreements,” per Alicia Wallace of the Denver Post. “The deals include benefits such as ticket-back advertisements, rotational signage, logo rights and mascot appearances.”
Wallace also noted that the nine agreements Sports Authority is trying to reject does not include naming rights for the Broncos home stadium, Sports Authority Field. In the case of the Broncos, the desire to split from the partnership seems mutual.
What’s interesting is that this is even an issue. Sports Authority is very close to going out of business, as the liquidation sales in all of their stores tell us. They’re clearly in financial trouble, and as such, it’s obvious that they don’t have the money to continue honoring multi-million dollar agreements with multiple professional sports teams.
Now, the teams are somewhat victimized here, too, as they’re missing out on funds. Wallace estimated that Sports Authority has missed $2.1 million in payments to the Broncos.
But one thing we have to consider is how much money professional sports teams make annually, especially NFL teams. Losing $2.1 million is never fun, but it’s a small portion of what they make. Additionally, it seems highly unlikely that any of these clubs will struggle to pick up new sponsors in Sports Authority’s absence.