The Denver Broncos is seeking to sever its sponsorship agreement with Sports Authority, which is in the process of liquidating.
According to a filing in U.S. Bankruptcy Court in Delaware, the team’s counsel charged that Sports Authority had breaching its contract by missing two quarterly payments.
“Yet, because of the protections afforded by the bankruptcy code, (Sports Authority) continues to enjoy exclusive sponsorship rights as provided for in the sponsorship agreement despite its failure to make two quarterly payments totaling $2,105,945.00,” the Broncos said in the filing.
The sponsorship, in place since 2011, gave Sports Authority the right to advertise in the stadium as well as use the Broncos name and logo in ads in store and online.
The Denver Broncos’ request comes as Sports Authority made an unauthorized attempt to sell the stadium naming rights in bankruptcy court. The Denver Metropolitan Football Stadium District, a corporate and political subdivision of the state of Colorado that owns Mile High, wants the first right of refusal if Sports Authority tries to sell the naming rights.
Bloomberg News, citing unnamed sources, said the company’s term-loan lenders were among those claiming to have collateral rights over Sports Authority’s intellectual property and contracts, including the naming-rights agreement.
While Gordon Brothers Retail Partners LLC, Hilco Merchant Resources LLC and Tiger Capital Group LLC won the auction to launch going-out-of-business sales at all of Sports Authority’s stores, Sports Authority is planning to hold an auction for its store leases. It will also look to sell its brand name, the intellectual property for its proprietary brands, and customer data lists.
