Under Armour sued by Cubs

January 23, 2009|By Bloomberg News

The Chicago Cubs baseball franchise sued Baltimore-based Under Armour Inc. yesterday, contending that the sports apparel maker reneged on a promised $10.8 million, five-year sponsorship agreement after its profits declined.

In a complaint filed in U.S. District Court in Chicago, the ballclub said the garment maker agreed to the deal and is still using Cubs players and the team's stadium, Wrigley Field, in advertisements for its products.

Under Armour told the Cubs in a Dec. 12 letter that it would not sponsor them for the next season and "would not meet any of its obligations under the agreement," according to the team's complaint, which seeks full payment of the contract price.

"Under Armour's abrupt, unilateral action has left the ballclub with no choice but to file suit to enforce its rights," the team said in a statement.

The company said in a statement last night that the Cubs sent a letter last summer "terminating the agreement after the second year. Unfortunately, we were unable to agree upon terms for a new deal and one was never signed."

Two years ago, the team and Under Armour announced an agreement that allowed the clothing maker to become the first sponsor to place ads on two 7-foot-by-12-foot doors set into the ballpark's ivy-covered left- and right-field walls. Wrigley Field was built in 1914.

Under Armour, blaming a weak retail environment, said last week that its fourth-quarter earnings will be lower than expected when it releases those figures Jan. 29. Among other things, the company said it experienced a higher cancellation than expected of orders from wholesalers. It also saw lower Internet sales. Shares of Under Armour, which fell 29 cents to close at $19.37 yesterday, are down 26 percent this year.

The Cubs are owned by Tribune Co., the Chicago-based company that publishes several newspapers, including The Baltimore Sun.

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