SBD/Issue 85/Sponsorships, Advertising & Marketing

MSG Sues SpongeTech For Failure To Pay For Ads At Sports Arena

MSG Sues SpongeTech For Over $430,000
It Claims It Is Owed For Rangers, Knicks Ads
MSG has sued SpongeTech for more than $430,000 it "claims it's owed for ads that ran during Knicks and Rangers games, after SpongeTech wrote one bad check and had another returned due to a stopped payment," according to Kaja Whitehouse of the N.Y. POST. The suit, filed this week in state Supreme Court in Manhattan, comes after the Mets' Citi Field sued SpongeTech in Queens Supreme Court for $300,000 it is owed for display ads at the ballpark. The MSG lawsuit indicates that SpongeTech COO Steve Moskowitz "worked out three separate three-year sponsorships to promote the company in and around" MSG during Knicks and Rangers games. MSG Senior VP/Corporate Communications Barry Watkins said that SpongeTech's ads at MSG "have either been taken down or are in the process of being taken down." Whitehouse notes the Yankees, "which also had a sponsorship deal with SpongeTech, broke off their relationship with the company in November at the close of the baseball season." A source said that the Yankees three-year deal had an "out clause after one year" (N.Y. POST, 1/15).

ON THE MEND? SpongeTech Thursday issued a statement saying the company is working with the Mets to resolve the team's lawsuit "as soon as possible." SpongeTech indicated it intends to get the issues resolved in order to continue its relationship with the team "into the future." The company has worked with over 26 pro sports teams and "plans to continue with many of them going forward" (SpongeTech).

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