SBD/April 24, 2013/Marketing and Sponsorship

USA Pro Challenge Cycling Race Sues Sponsor Exergy For $2.5M Nonpayment

USA Pro Challenge said sponsorship for its August race will be up at least 20%
USA Pro Challenge race organizers, under the plaintiff name Classic Bicycle Racing, filed suit April 10 against Exergy Development Group for $2.5M, "saying that was the amount Exergy agreed to give the race in 2013 as part of a three-year sponsorship deal signed last year,” according to John Henderson of the DENVER POST. Event CEO Shawn Hunter “refused to comment on the lawsuit but did say, despite Exergy's failed payment, sponsorship for his August race will still be up at least 20 percent over last year.” Exergy "agreed to pay the race" $1M from May 10-Sept. 30, 2012; $2.5M from Oct. 1, 2012-Sept. 30, 2013; and $2.5M from Oct. 1, 2013-Sept. 30, 2014. The company then “failed to make its first sponsorship payment of $500,000 on Sept. 1.” After giving a check “for $100,000 four days later, it failed to make a second payment of $500,000 on Sept. 15.” The suit claimed that Exergy also “didn't make a payment of $750,000 on Feb. 1.” Hunter has “landed other sponsors, not yet named, to counteract the loss of Exergy." Meanwhile, Lance Armstrong's doping confession in January was a “nonfactor." Hunter said, "No one's come out and said, 'We're not going to sponsor your race because of what happened in the past or what happened in the early part of '13'" (DENVER POST, 4/24).
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