The Denver Broncos have the U.S. Bankruptcy Court’s permission to ax their sponsorship contract with the bankrupt Sports Authority.
Judge Mary F. Walrath on Friday granted the Super Bowl champions’ May 27 motion to terminate their Aug. 1, 2011, sponsorship agreement with Englewood-based Sports Authority. Sports Authority also sought to exit the contract.
Patrick Smyth, a Broncos spokesman, declined to comment.
Under the agreement, the exclusive “retail sporting goods” sponsor of the Broncos was granted a non-exclusive license to use the team’s trademarked logo in places such as websites, advertising and in-store signs; advertisements and signs. The deal also gave the retailer hospitality benefits such as box seats and Super Bowl tickets.
The Broncos have more than 25 sponsors, but team officials consider Sports Authority to be one of the more significant partners.
Sports Authority’s sponsorship contract, which expires in 2035, is valued at more than $55.3 million, court records show. The company owes the Broncos $36 million.
Separate from the sponsorship agreement, Sports Authority has a contract with the Denver Metropolitan Football Stadium District for the naming rights to Mile High Stadium, the Denver Broncos’ home field.
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.
Meanwhile, people familiar with the liquidation of Sports Authority told the Wall Street Journal that U.K. sporting goods retailer Sports Direct International PLC is in talks with Modell’s Sporting Goods about a potential deal to acquire as many as 200 Sports Authority stores.
Sports Authority revealed in court papers filed Friday that it is in advanced discussions regarding a potential sale of 100 to 200 of its stores. On Monday, people familiar with the situation told The Wall Street Journal that Modell’s and Sports Direct are discussing teaming up on a bid for these stores.
Modell’s and Sports Direct didn’t immediately respond to The Wall Street Journal’s requests for comment Monday afternoon. A Sports Authority representative declined to comment.
Bids for Sports Authority store leases are due Thursday, and stores with leases that go unsold are in danger of going dark. With going-out-of-business sales in full swing at some 450 Sports Authority stores, the possible deal could be the last hope of saving anything of the ailing business, The Wall Street Journal reported. Sports Authority filed for chapter 11 bankruptcy in March and is expected to wrap up its liquidation by the end of July.
