By RYAN TOLMICH
Six months after agreeing to a sponsorship deal, the Colorado Rapids are taking legal action against the company that emblazons their jersey.
The Denver Post reported on Thursday that the Rapids have filed a lawsuit against the parent company of sponsor Ciao Telecom over $485,000 in missed payments. Ciao Telecom, which signed a sponsorship deal with the club in June, allegedly missed a pair of payments in September and July, while shortchanging the Rapids on an initial payment.
The Rapids were expected to make $800,000 from the deal this season, but Rapids president Tim Hinchey admitted earlier this month that payments could be delayed due to Ciao’s recent business moves, which include a merger.
“They’re still a little behind on their launch,” Hinchey said. “They’re looking at retail locations. As we said before, 2014 was about getting the name out for them, and that’s why they took a punt with us.”
Ciao’s stock price has been plummeting since July and a sponorship with Serie B’s Reggina Calcio has apparently been terminated after the Italian club removed the company logo from the club website.
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What do you make of the Rapids’ sponsor troubles? How do you think the league handles sponsors as a whole?
Share your thoughts below.
Some day may be we’ll see these kind of numbers….
http://www.independent.co.uk/sport/football/news-and-comment/manchester-uniteds-chevrolet-deal-pushes-premier-league-shirt-values-to-191m-9635617.html
All they needed to do is a close look at ciao founder, they would have recovered everything from California to Brazil to Milan, Ciao telecom is only a website, there is no business behind it. It is all a Scaaaam and KSE fall for it.
I fee sorry for the Team.
Did Colorado do their homework before signing with these sponsors? What kind of sponsor struggles to pay $485K?
Well, as Ciao and the Rapids now know, you get what you pay for, or not. Jersey sponsors are relatively new to the sport of Football/Soccer and in US. sports You do not see commercial adverts on Jerseys, kits or uniforms of ANY of the teams in the NBA, NFL, MLB, or the NHL, as such some MLS teams do not have a the experience or model for an agreement for these types of sponsors.
But I come from a cycling background, where jersey sponsors are the primary. and in most cases, the sole financial support for a team, it can be a very simple process. I’m sure the contract that both signed have remedies for breaches, but the MLS can do itself one better by making sure jersey sponsors, supply the team with a binding bank letter of credit for a fall back, an upfront payment of at least 35 percent of the monetary agreement that under 1 mil and 25 percent over a mill, with scheduled payments and a trigger point for the letter of credit. These terms are for new sponsors with no prior sponsorship agreements with the club, and returning sponsors can of coarse, get a better deal.
Apparently the clubs failings in football matters do not only pertain to the field.
Didn’t Leverkusen get sued because their sponsor filed for bankruptcy and they had to repay funds they had previously received?
I guess this happens occasionally, even with more established leagues and teams. Better luck next year, Rapids!
Pretty clearly there was a “due diligence” failure in this agreement on the part of the Rapids. Apparently the deal was part of Ciao’s roll out for a brand new ad-supported cheap mobile service…well, what happens if that service doesn’t catch? I’m not an expert, but tying your shirt sponsorship revenue to a business that hasn’t really been established seems pretty risky at best. Did they need a shirt sponsor that badly?
where is the story about the plane flying around DSG Park at the last game carrying the banner “You wrecked our club, KSE and Hinchey out!”
KSE, Hinchey, Bravo – absolute disaster of an organization.
Hinchey probably put a stop to that too, just like how he got that Rapids beat reporter fired, the one who tweeting negatively about the Rapids front office. He must be part of the Illuminati:)
Sounds about right. I wouldn’t be surprised if Ciao has made those payments, but Hinchey is just using this as an excuse to NOT sign another DP and try to improve the team.
“We wanted to improve our team from the giant mess that it is now, but we don’t have that sponsorship money. Sorry Rapids fans.” – Tim Hinchey
“Excellent. I can get another ivory backscratcher” – Stan Kroenke, while rubbing his hands together atop his Pepsi Center penthouse apartment
LOL.
They won’t be receiving any of that money.
Free advertising!
Just Call 1-888-4-RAPIDS
Yeah, all you have to do is file for bankruptcy. You are a bargin shopper Movsisyan.
First thier coach gets robbed! Now their money is robbed!!