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Expert: Stadium naming rights contributing to Sports Authority’s reported financial trouble

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ENGLEWOOD, Colo. -- Sports Authority is reportedly having major financial troubles. The Englewood-based sporting goods chain missed a $21 million interest payment last week, prompting concerns over the company’s future.

Business insiders are reporting Sports Authority is thinking about bankruptcy and closing some of its stores across the country. None of that is for sure, but if the rumors are true, local marketing and financial experts think they might know why.

Depending on how long you’ve lived in Denver, you either call it “Mile High,” “Invesco Field” or by its real name, “Sports Authority Field at Mile High.” The  sporting goods chain bought the naming rights to the home of the Broncos in 2011.

“It was really a reaction to Dick’s Sporting Goods kind of coming into their market,” Metro State University of Denver marketing professor Darrin Duber-Smith said.

Duber-Smith said at the time, marketing analysts saw it as a $60 million gamble.

“There was a lot of talk about whether or not the company could afford it,” he said.

Five years later, Sports Authority has missed its scheduled debt payment. Duber-Smith thinks it could be linked to the stadium gamble that likely didn’t pay off.

“You’ve got to have a lot more than just a name on a stadium. You’ve got to have a lot more in your budget to leverage, to activate that sponsorship and be able to maximize the value the company can potentially get out of it,” Duber-Smith said.

Since Invesco Field at Mile High became Sports Authority Field at Mile High, online shopping has exploded. The phenomenon also likely cut into Sports Authority’s sales over the past five years, leaving less money to stimulate its biggest sponsorship.

"Just because people know your name doesn’t mean they’re not going to go to REI the next day instead of Sports Authority,” Duber-Smith said.

With all eyes on the Super Bowl-bound Broncosm Sports Authority could get a bump in the right direction.

“Having a few mentions might help in the short run, but in the long run, they’re going to need more money to shore up operations in other markets,” Duber-Smith said.

The biggest question is still, what effect, if any, could Sports Authority’s financial health have on the name of the Broncos' stadium? The company has a contract to retain the name through 2021 as long as it continues to make its yearly $6 million payments.

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