NIKE and the NBA Basketball Hall of Fame Sued for Fraud and Other Claims by SportsFuzion Over Michael Jordan Products
BOSTON, MA--(Marketwire - June 24, 2009) - SportsFuzion, Inc., a sportswear company and
the exclusive licensee of the Basketball Hall of Fame's sportswear, has
filed a lawsuit in Norfolk Superior Court in Massachusetts against NIKE,
Inc. (NYSE: NKE) and the NBA Naismith Memorial Basketball Hall of Fame
alleging breach of contract, tortious interference with contract, fraud,
and other counts for general and punitive damages. The lawsuit alleges
that NIKE and the Hall of Fame conspired to eliminate SportsFuzion by
manufacturing, marketing, and selling sportswear related to Michael
Jordan's upcoming Hall of Fame induction. Since 2006, SportsFuzion has
been the owner of the exclusive worldwide rights to the Hall of Fame's
trade names, logos, trademarks, designs, and photos for use in sportswear.
Leveraging Michael Jordan's highly anticipated Hall of Fame induction, NIKE
will release its Air Jordan Hall of Fame (HOF) Collection into the market
this summer. NIKE recently launched a major campaign to promote these
products. This campaign includes the website www.getyourbasketballon.com
featuring several videos of the fictitious character -- Leroy Smith -- who
supposedly inspired Michael Jordan to greatness. It is estimated that NIKE
could sell over $100 million of Michael Jordan Hall of Fame products
worldwide.
Beginning in 2005, legal teams for SportsFuzion and the Hall of Fame spent
nearly a year negotiating the exclusive worldwide licensing agreement.
More than three years ago, SportsFuzion created the concept and a detailed
marketing plan around a product line for Michael Jordan's induction into
the Hall of Fame. "In 2005, I knew that Michael Jordan's induction would
be the biggest event in the Hall of Fame's history and, like his impact on
the NBA and the game of basketball, this product opportunity was enormous,"
said Andrew Mirken, president and co-founder of SportsFuzion.
"SportsFuzion was built around my love and passion for basketball and my
admiration for Michael Jordan," said Mirken, who has coached high school
boys' basketball for almost 20 years. "Having the opportunity to work with
Michael Jordan and all of the great athletes in the Hall of Fame was the
dream of my lifetime. Having NIKE and the Hall of Fame go behind our backs
to cut us out of the deal has become my worst nightmare."
After entering into the exclusive worldwide license agreement with
SportsFuzion, senior level executives at the NBA helped arrange numerous
meetings for SportsFuzion with Adidas/Reebok, Mitchell and Ness, and others
in hopes of product partnerships being formed. Beginning in the fall of
2006, SportsFuzion met multiple times with top executives from Brand
Jordan. After being provided with a copy of SportsFuzion's agreement with
the Hall of Fame and after being educated about the opportunity, NIKE
turned SportsFuzion down. Among the NIKE executives that considered
SportsFuzion's proposal were Howard White, VP Sports Marketing Brand
Jordan, who, on November 21, 2007 wrote SportsFuzion saying, "I just
wanted to let you know that we've looked at the opportunity with the Hall
of Fame from all angles. Our marketing people have looked at it along with
our product team. At this time the team feels that it's not an opportunity
that we can make happen. We really appreciate the time and consideration
that you've given us here in Brand Jordan with Michael going into the Hall
of Fame but we've explored every opportunity and at this current time there
isn't a fit."
Two months later in January 2008, the Hall of Fame contacted SportsFuzion
to "renegotiate" its contract. "It became clear to us that NIKE wanted to
do a deal directly with the Hall of Fame and that meant the Hall of Fame
had to get out of their agreement with us," said Steve Barlow, co-founder,
lead investor and SportsFuzion Board Director. "It was a complete surprise
when the Hall of Fame told us they did not understand the totality of the
rights they granted our company and that our agreement was not good for the
Hall of Fame. Nike's recent Michael Jordan Hall of Fame launch was a total
shock to us because we had financed and built the company around this
exclusive licensing agreement, and always operated in good faith. We
sensed something unethical was in the works -- and unfortunately we were
right."
SportsFuzion, Inc. is a Massachusetts-based sportswear company that owns
the exclusive worldwide rights to the Basketball Hall of Fame's trade
names, logos, trademarks, designs, and photos for use in sportswear.
SportsFuzion is represented in this matter by Fish & Richardson, the
largest intellectual property law firm in the world.