Florida marketing firm suing IRL over Izod contract

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A Florida-based sports marketing firm that claims it is owed millions of dollars in commissions for landing Izod as the Indy Racing League’s title sponsor is suing the series.

Boca Raton-based CV Sports Marketing Inc. filed suit Thursday in Marion Superior Court, claiming breach of contract, unjust enrichment and defamation, as well as other charges.

The firm alleges that it is entitled to 10 percent of the revenue generated from the sponsorship agreement—fees that could be as high as $10 million based on CV Sports Marketing's estimate that the Izod deal is worth up to $100 million.

The lawsuit also names IRL affiliate Indianapolis Motor Speedway as a defendant.

“Rather than pay the amounts due and owing, defendants have utilized their position of power in their market to engage in a concerted effort to defame CV Sports and to interfere with its contractual and business relationships,” the complaint said.

The IRL, now known as IndyCar, issued the following statement Monday in response to IBJ inquiries: "We [had] heard these allegations before the filing of this lawsuit and denied them as being without merit.  This filing does not improve their merits.  With these allegations now in litigation, it is appropriate for us to refrain from further comment at this time."

CV Sports, which also has clients in the National Football League and National Basketball Association, began representing IndyCar drivers in 2001.

Aware of that expertise, Speedway and IRL executives who were seeking a sponsor specifically from the apparel industry entered into an agreement in 2008 with the firm to pursue marketing opportunities, the lawsuit said.

New York-based Phillips-Van Heusen Corp., whose brands include Van Heusen, Bass, Geoffrey Beene and Izod, became interested and signed a letter of intent on May 20, 2008.

The initial sponsorship agreement called for Phillips-Van Heusen to make cash payments to the racing series of $250,000 in 2008, $300,000 in 2009, $350,000 in 2010, and $400,000 in 2011, according to the suit.

The series paid CV Sports its 10-percent commission, or $25,000, from 2008 to 2010, but has not paid the amount due in 2011, the firm alleges.

Further, and more important to the suit, Phillips-Van Heusen expanded its sponsorship agreement in November 2009 to become a title sponsor of the series. The Speedway and IRL have refused to disclose the value of that deal, the complaint said.

The lawsuit maintains, though, that industry insiders estimate the deal to be worth about $15 million annually over the contract, which runs for six years and has an additional two-year renewal option.

The firm alleges that the Speedway and IRL began a concerted effort to defame CV Sports executive Howard Jaffe and the company to avoid paying the commissions.

In January 2010, Jaffe and CV Sports began to notice a change in their relationship with Phillips-Van Heusen, according to the lawsuit.

“Simply stated, PVH employees and representatives now effectively refuse to meet or do business with Mr. Jaffe,” the suit said. “This change resulted from conduct by IMS and IRL which included defamatory statements and interference with the PVH relationship.”

Specifically, CV Sports alleges that IMS and IRL executives have called the firm “untrustworthy” and have told some in the racing industry that its employees have been “kicked out of every garage on the circuit.”

CV Sports also contends that it lost at least two related deals with the AJ Foyt and Andretti motorsports teams that could have brought hundreds of thousands of dollars in commissions as a result of false statements made by the series.

The company is seeking unspecified damages and has requested a jury trial. It is represented by local attorney Robert MacGill at Barnes & Thornburg LLP.
 

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