Watch CBSN Live

Reebok Drops Olympic Deal

Reebok International dropped a multimillion dollar sponsorship deal with Sydney Olympic organizers and sued Wednesday over an alleged breach of contract.

Reebok Australia general manager Keith Forbes said the company had terminated the deal, estimated at $9.45 million, because Sydney organizers struck deals with competitors Bonds and Canterbury.

Reebok was to be the official sports brand of the Sydney Olympics and the exclusive supplier of sports brand product to the Sydney organizers, the Australian Olympic Committee and the Sydney Paralympic Organizing Committee.

"We got to some serious mediation last week but they've been pretty inflexible in their resolve," Forbes said.

Forbes said the company was still hoping to outfit the Australian athletes.

Sydney organizing chief executive Sandy Hollway said Reebok still owed the organizers millions of dollars in cash and goods and should not be able to "cherry pick" parts of the deal, such as outfitting the athletes.

"We're very disappointed that Reebok has announced it intends to terminate the sponsorship," Hollway said.

In Lausanne, Switzerland, International Olympic Comittee officials downplayed the incident.

"This is very much a local issue," IOC marketing director Michael Payne said. "I spoke today to Reebok and they remain committed to the Olympic movement. I think this has been blown totally out of proportion. It is very much a local commercial licensing dispute."

IOC vice president Dick Pound, who negotiates the agency's international marketing deals, added: "This is a local issue solely with SOCOG. This is not the end of the world. It doesn't reflect disaffection by the sponsor with the Olympic movement generally."

©1999 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed

View CBS News In
CBS News App Open
Chrome browser logo Chrome Safari browser logo Safari Continue