January 26, 2009 / 7:20 PM / 11 years ago

Chicago Cubs baseball team sues Under Armour

CHICAGO (Reuters) - The Chicago Cubs baseball team has sued Under Armour Inc, charging the athletic clothing and shoe maker with reneging on a five-year sponsorship agreement worth $10.8 million.

Chicago Cubs fans take photos of the marquee outside of Wrigley Field before the start of Game 1 of the MLB National League Divisional Series playoff baseball game between the Los Angeles Dodgers and the Chicago Cubs in Chicago, October 1, 2008. REUTERS/John Gress

The Cubs, in documents filed in a U.S. District Court in Chicago on January 22, said Under Armour breached a contract in which it agreed to pay the Cubs more than $2 million a season from 2009 through 2013.

Under the deal, the Cubs would display Under Armour’s company logo on the outfield doors at its home park of Wrigley Field, and the Baltimore-based company would receive the right to use the Cubs logo, according to court documents.

The team said it agreed to the deal in September 2008 with Under Armour, which had placed its logo amid the ivy-covered outfield walls during the 2007 and 2008 baseball seasons.

In December, however, Under Armour said it would not be a sponsor for the 2009 season and would not meet any of its obligations under the agreement, the Cubs said.

The Cubs cited Under Armour’s preliminary fourth-quarter results, which on January 15 were far below analysts’ expectations and sent company shares sliding almost 15 percent.

Under Armour officials said the Cubs terminated a previous deal and the two sides could not finalize terms of a new deal.

“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,” Under Armour Senior Vice President Steve Battista said in a statement.

“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 and one was never signed,” he added.

The U.S. recession has caused numerous companies, including General Motors Corp and FedEx Corp, to cut their sports-related marketing budgets to save money.

On Friday, Chicago investment bank chief Tom Ricketts and his family were picked as the winning bidder for the Cubs, which bankrupt media firm Tribune Co is selling.

The case is Chicago National League Ball Club Inc v. Under Armour Inc, U.S. District Court, Northern District of Illinois, No. 09-00419.

Reporting by Ben Klayman, editing by Matthew Lewis

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