The Sacramento Kings have filed an $8.3 million claim against the Power Balance corporation, the amount they would lose over the next five years if the new ownership decides not to honor the original stadium naming rights deal from last year. According to bankruptcy court filings, the new owners of the company are within their legal rights to walk away from the contract but have also been in talks with the Kings about crafting a new arrangement. Hanyang LLC, the firm which bought the Power Balance name at auction for only $7 million, has also backed out of dozens of endorsement deals with athletes and celebrities.
The previous owners never made full payment for the first year’s stadium naming rights, leaving the Kings on the hook for $275,000. Through 2016, the company had agreed to pay another $7 million to keep the deal going. That all came to a halt after class-action lawsuits forced the company to admit the rubber wristbands they made had no appreciable value and offer full refunds to all of its customers. Bankruptcy came shortly afterwards.
The attorney representing the Kings says that to remove all Power Balance logos from the arena, stationary, and merchandise will cost the team another $200,000.
Many, including this author, were highly skeptical of the naming-rights change from the day it was announced. The company was already debunked by several media outlets to be little more than a pyramid scheme. But most the local press didn’t bat an eye to the naming-rights deal. Even the mayor was on board at the time;
“Definitely look for me to be wearing a wristband at the next Kings game,” the former NBA star said in a statement issued by his press secretary.
I wonder if he’s still wearing it today. Which way is the wind blowing?
Source: Sacbee
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The Maloof’s had no choice in ‘selecting’ Power Balance — they were the only belles to show up at their naming-rights ball…. But even then they obviously would have been better off with NO NAME ARENA because lawyer fees are going to eat up far more than the piddly sums received from PB thus far….
But when PB filed for bankruptcy protection last fall, the Maloof’s had a duty to mitigate damages and seek another naming rights successor — actually, given the precariousness of PB and its bizarre products and generous overspending on product endorsements (who the heck cares WHAT dribblers say in the first place!!!), they should have been on notice that this ridiculous product would not deliver on its contracts — and I seem to recall a WHOLE LOT OF FOLKS warning them against this, including mere comments here — which is in itself a form of notice….
Obviously the Maloof’s have neither sought a replacement nor had any interest expressed by any other suitor, no doubt because their ‘brand’ is tainted, the value of the team plummeting for some time, its fan base only propped up by local media saturation, with potential buyers of the team just waiting for the final nail in the coffin of the team to swoop in and purchase at its lowest possible value….
THIS is what the city of Sacramento is being enticed to invest in??????? NO THANKS!
They will be lucky to afford the moving vans to Anaheim….
In other news, the Maloofs have filed suit against the makers of “Shinola” shoe polish, which they claim they cannot adequately distinguish from a pile of feces. The Maloofs’ lawyers were uncertain about filing suit, as they are pretty certain that the shoe polish company went out of business years ago.
The Maloofs’ legal staff raised concerns because most lawyers prefer to sue people with money, as they are more likely to pay if they win the lawsuit, unlike (as a theoretical example) the operators of a cheesy pyramid scheme that has already declared bankruptcy and whose assets have already been purchased by another creditor.
Despite these concerns, the Maloofs have insisted on demanding compensation, because, according to them, “It always works when we ask Sacramento for money.”
What I can’t quite understand is how the Maloofs got to make any money on the name change in the first place. ARCO arena is owned by the State of California, not the Maloofs. The land swap deal was rejected (http://www.news10.net/news/story.aspx?storyid=97377). So shouldn’t the money Power Balance paid the Maloofs have gone into the State General Fund?