Mattress Discounters gets OK to drop baseball deal

CHICAGO Nov 6 (Reuters) - U.S. bedding retailer Mattress Discounters Corp received bankruptcy court permission to drop its sponsorship of the Washington Nationals baseball team, according to court documents.

The company, which filed for Chapter 11 bankruptcy protection in September for the second time since 2002, obtained approval on Monday from Judge Thomas Catliota of the U.S. Bankruptcy Court in Greenbelt, Maryland, to terminate the deal, which was signed on Jan. 1.

In its Oct. 14 motion, Mattress Discounters called the agreement "burdensome" and said it offered the company no benefit now that the Nationals' baseball season was over.

Mattress Discounters did not disclose details of the contract, citing confidentiality provisions, according to court documents.

However, the Upper Marlboro, Maryland-based company said it made monthly payments, starting in April and scheduled to end in October, to the baseball team for "certain sponsorship opportunities" at the club's home ballpark this season, according to court documents.

Catliota ruled the deal could be terminated as of the date of the motion's filing in October, according to court documents.

Mattress Discounters previously said in its September bankruptcy filing that it had been hurt by an industry downturn and the weakened economy.

In the first half of 2008, Mattress Discounters, known in its markets for the slogan "Have a good night's sleep on us," had revenue of about $49 million, and a net loss of about $8 million, according to court documents. Last year, it had revenue of about $122 million and a net loss of about $3 million.

When the 30-year-old company filed for bankruptcy, it operated 140 stores in six states in the U.S. Northeast, down from the 240 it had before it first filed in 2002. Last year, a deal for Mattress Discounters to be acquired by Texas-based Mattress Firm fell apart.

Mattress Discounters' restructuring included a plan to exit the New England region, where it had 50 stores and through August had posted a loss of about $2.9 million. It previously said it wants to refocus on the Mid-Atlantic region, where it had 90 stores when it filed for bankruptcy.

Nationals officials could not be immediately reached to comment. (Reporting by Ben Klayman, editing by Matthew Lewis)