PrimeBlock Ordered to Pay $400,000 to Pelicans for Breached Sponsorship Deal

Author:

Patricia Bell

|Published: August 12th, 2024

PrimeBlock, a blockchain technology provider based in the US, has been ordered to pay $400,000 (€366,320) to the NBA's New Orleans Pelicans after failing to meet sponsorship payment deadlines dating back to 2022.

This development marks another instance of a cryptocurrency-based company struggling to fulfill its sports sponsorship commitments.

The company, valued at approximately $1.25 billion following a venture capital acquisition offer in 2022, aimed to list on the Nasdaq stock market.

However, the cancellation of its special purpose acquisition vehicle (SPAC) transaction in September 2022 put significant strain on its five-year sponsorship agreement with the Pelicans, which was signed in October 2021.

In response to PrimeBlock's missed payment deadlines, the Pelicans pursued legal action.

The US District Court for the Eastern District of Louisiana has now mandated that PrimeBlock pay the remaining $400,000 as per a previous settlement agreement.

According to Law360, this amount represents the balance of a $500,000 settlement, of which PrimeBlock had already paid $100,000.

The lawsuit detailed that the Pelicans accused PrimeBlock of breaching the contract after missing a payment deadline for $776,000 in annual fees, even after an extension was granted.

The Pelicans agreed to settle for $500,000, but PrimeBlock failed to honour this agreement, leading to the court's intervention.

Industry experts indicate that lower-tier NBA teams typically secure multiple sponsorship deals worth approximately $500,000 annually with second-tier sponsors.

The Pelicans' most lucrative sponsorship deal is their jersey patch agreement with mobile technology company Ibotta, which was extended for another three years until the 2024-25 season in September 2022