September/October 2016 -- Those of you who are Bob Dylan fans will recognize the title above from one of his famous songs first released in 1964. I reference it because it is apropos for what has happened with our major endorsee, Prince.
Unbeknownst to us until early April, the company (the Waitt Group) that licensed the Prince brand from Authentic Brands Group (ABG) decided, after two years of operation (2014-2015), to discontinue the business (for reasons which I am not privy). Thus, the Prince licensee reverted back to ABG in mid-March, thereby scuttling the Prince Global Sports Group with whom we had our endorsements. The corporate offices in Atlanta have since been closed and almost all of the staff is no longer employed.
Once we were advised of this change, Authentic Brands Group let us know that they were not legally bound to honor the endorsement agreements that we had previously negotiated with Prince Global Sports. Strategically, their intent is to find another company that would become the licensee for the Prince brand, but as of this writing, no announcement has been made nor have we been advised as to who that new entity is. It is entirely possible that if they are unable to find a suitor to take over the brand, they may determine it best to continue to operate the brand, even though that is not part of their corporate model.
So, we find ourselves in a very difficult and unexpected situation. We have members who were promised equipment that won’t be shipped. We have divisions that did not receive the ball allocation that they were expecting. And corporately, the revenue and retirement plan contributions that Prince had committed to us through August of 2018 are no longer intact. I can honestly tell you that since being notified of this change, we have done everything on our end to be good corporate soldiers during this uncertain period by upholding our end of the bargain, hoping that a satisfactory solution could materialize.
As of July 1, it does not appear as if a remedy is in the offing. With the help of our in-house general counsel, the board is evaluating options that could be pursued to protect our brand and image within the marketplace. We are in the process of unwinding our agreement. Meanwhile, it is vital that we try to find a suitable replacement for Prince for both hard goods and tennis balls. With the challenges facing the tennis industry at present and the time constraints for this process, this is not going to be an easy task.
Once we have confirmation of a new endorsee relationship, we will share it with you immediately. Thanks for your ongoing patience as we undergo this process.