The Chicago Cubs are suing Under Armour for breach of contract; it is the most recent occurrence of sponsors pulling out of sports contracts due to financial woes.
The Chicago Cubs filed court documents on Jan. 22 to sue Under Armour Inc., claiming that the company that makes that athletic apparel pulled out of a $10.8 million sponsorship contract for five years. The Cubs assert that Under Amour was supposed to pay the Cubs more than $2 million per year from 2009 through 2013, according to Reuters.
As part the deal, the Cubs would have placed the Body Armour logo on the Wrigley Field’s outfield doors, and the company would also be able to use the Cubs logo in its products.
“Under Armour’s abrupt, unilateral action has left the ball club with no choice but to file suit to enforce its rights,” the team said in a statement, Bloomberg reports.
The Cubs had displayed Under Armour’s logo on the outfield walls for the 2007 and 2008 seasons, and the team claims that the recent deal was made in September 2008. But in December Under Armour said it would not abide by the agreement, Reuters reports.
Under Armour Vice President Steve Battista contested the terms of the agreement. “Under Armour entered into a three-year agreement with the previous management of the Chicago Cubs for a comprehensive marketing package that included the exclusive signage on Wrigley Field,” he said, according to Bloomberg. “This past summer the Cubs new management sent us a letter terminating the agreement after the second year. Unfortunately, we were unable to agree upon terms for a new deal.”
Under Armour appears to be another victim of the economic crunch, reporting worse-than-expected fourth-quarter numbers on Jan. 15. As a result, company shares fell about 15 percent, according to Reuters.
The owner of the Cubs is suffering financially as well: the bankrupt Tribune Co. has put the team up for sale. On Friday, Tom Ricketts, the head of a Chicago investment bank, was chosen as the highest bidder for the Cubs, clearing the way for him to buy the team.