Following a ruling by a U.S. Bankruptcy Court, the Denver Broncos can now terminate their sponsorship contract with Sports Authority, but a naming rights deal remains in limbo.
Starting in 2011, the Englewood, CO-based sporting goods chain Sports Authority formed a major sponsorship agreement with the team, making it the exclusive retail sporting good partner of the Broncos. In March, the company filed for chapter 11 bankruptcy and is reportedly working to liquidate all of its assets by the end of July.
The ruling from the court follows a motion that was filed by the Broncos last month. For its part, Sports Authority had also filed to get out of sponsorship agreements with the Broncos and eight other major sports franchises. The sponsorship agreement with the Broncos was valued at $55.3 million dollars, and was to run through 2035.
A separate issue is the naming rights for Sports Authority Field at Mile High. Rather than lumped in as part of the sponsorship package, Sports Authority’s naming rights agreement is with the facility’s owner, the Denver Metropolitan Football Stadium District. Sports Authority is attempting to liquidate that asset via auction, which remains a point of contention. Specifically, stadium and team officials feel that Sport Authority’s move is unprecedented among naming rights contracts and want more say in the deal. More from the Denver Post:
Sports Authority is in the process of auctioning the naming-rights contract and has enlisted Hilco Streambank to find buyers for that agreement and for its intellectual property, including customer databases, private-label brands and domain names. But the stadium district filed a protest in bankruptcy court seeking first right of refusal if Sports Authority finds a new naming sponsor.
Hilco Streambank has set a 3 p.m. June 27 deadline for bids on the intellectual property assets. The U.S. Bankruptcy Court in Wilmington, Del., has set an auction date of June 29 for some Sports Authority store leases and other remaining assets.
The team has previously stated that it could adjust its stance on the issue after the deadline, should a favorable naming rights partner emerge.
Image of Sports Authority Field at Mile High courtesy of the Denver Broncos