Sports Authority has until Sunday to pay lenders money the company borrowed in order to avoid bankruptcy, according to a CNN report.
S&P downgraded the company to level D, which states they don’t think the company will repay its debt.
However, despite the financial trouble, marketing experts tell Denver7 they think the company should continue investing in its naming rights to Mile High Stadium, home of the Super Bowl 50 Champions.
“I would say, if you can afford to keep the name, keep the name,” said Dan Price, president of Adrenalin, Inc. a sports marketing company.
Sports Authority pays around $6 million a year for their contracts to have their name on the stadium in Denver.
The Englewood-based company took over the contract from Invesco, who used to own the naming rights. However, the contract isn’t even half of what other companies pay for naming rights at a stadium.
Met Life Insurance reportedly pays some $18 million a year for the stadium that houses the New York Jets.
AT&T pays nearly $20 million to have their name on the Dallas Cowboy’s stadium.
A representative for the Broncos wouldn’t comment directly about reports of the company’s financial turmoil, but issued the following statement:
"Sports Authority has been an excellent partner with our organization for the past 10 years. During this period, they have made every payment as part of our sponsorship and naming rights agreements.”
A representative from the Metropolitan Football Stadium tells Denver7 the company hasn’t missed a payment and that their next payment of more than $3 million is due in August.
Price said naming rights is a huge advantage for companies to have in order to compete.
“When people look at Sports Authority and they have other choices they might say, 'Well, I’m going to go with Sports Authority because they support my favorite team',” he said.
Matt Yonin, of Tigris Sponsorship and Marketing, said there is a direct correlation between naming rights and selling your product.
He doesn’t see the companies’ naming rights as a direct reason why they would have to file for Bankruptcy.
“There’s just that loyalty that comes with it that you can’t pay for in a commercial,” he said.