January 23, 2009
The Cubs filed a federal lawsuit Thursday against former advertiser Under Armour, accusing the athletic apparel company of reneging on a $10.8 million partnership contract — a deal the company says never existed.
The Cubs paired with Under Armour in February 2007 as part of a ”historic marketing agreement” with the company, according to the suit filed in U.S. District Court. The agreement gave Under Armour rights to signage on the doors along the brick-and-ivy outfield walls of Wrigley Field, plus access to the field and players to film commercials.
The suit claims the deal ”generated significant publicity” for Under Armour throughout the 2007 and 2008 seasons, prompting its brand manager, Colin Clark, to enter a five-year agreement with the Cubs in September 2008. In exchange for marketing benefits, Under Armour agreed to give the Cubs $10.8million to be the team’s ”Official Performance Brand” for the 2009 through 2013 seasons, according to the suit.
However, Under Armour’s year-end earnings were ”lower than expected and did not meet industry expectations,” the suit said. The company’s stock fell 15 percent, and according to the suit, Under Armour expects its 2008 income to be $10 million less than in 2007. When executives realized their financial situation in December, the Cubs allege they breached the contract and told the team the $10.8 million would not be coming.
Under Armour senior vice president Steve Battista released a statement Thursday night that said in part: ”This past summer, the Cubs’ new management sent us a letter terminating the [original three-year] agreement after the second year. We were unable to agree upon terms for a new deal, and one was never signed.”
Sun-Times News Group