Kansas City Chiefs suing their ‘official tequila’ provider for $4 million. Here’s why
The Kansas City Chiefs have filed a lawsuit against its recent “official tequila” provider for nearly $4 million, alleging the spirits company missed payments before the football team terminated its contract.
California-based Don Neron Spirits agreed to become the official tequila of the team for the 2022 to 2028 seasons for a price tag of $4,075,614. But in a lawsuit filed last month in Jackson County Circuit Court, the Chiefs allege the company paid its first installment of $180,000 months late before failing to pay the next two.
All told, the Chiefs are asking a judge to order the spirits company to pay $3,939,700 — which includes the remaining contract fee, about $39,000 in interest and attorneys’ fees.
In the lawsuit, which alleges breach of contract, a lawyer for the Chiefs said the first payment was due in April 2022, but was not made until August of that year. The attorney, with the law firm Polsinelli, said the company owed $7,300 in interest.
The second payment of $180,000 was due in July 2022, but Don Neron did not make that one, according to the lawsuit. Interest for that amounted to about $16,800.
The third fee was to be paid in August 2022, but since Don Neron did not make it, the company owed more in interest: about $14,900, the attorney wrote.
The Chiefs also said they are entitled to $5,000 in expenses for what it cost to enforce the contract, such as attorneys’ fees.
In February of this year, the football team terminated its agreement with Don Neron.
As part of the lawsuit, the Chiefs made public its contract with Don Neron, which gave it the right to call itself the “official tequila of the Kansas City Chiefs.” Such partnership deals are often kept “under wraps,” as the Kansas City Business Journal, which first reported on the lawsuit Tuesday, put it.
The contract showed the spirits company agreed to increasingly pay more per season, from $540,000 in 2022 to $626,235 in 2028. Don Neron also agreed to pay additional fees for each post-season game.
As part of the partnership agreement, the Chiefs would display Don Neron’s logo in a social media video and on signage at menu boards in Arrowhead. The team also agreed to re-brand bars within the stadium and do other on-site marketing.
Among other perks, the agreement meant that at each home game the Chiefs would display Don Neron’s logo “on a wing of the ArrowVision video board for a total of one minute,” as well as on the stadium’s upper LED sign for a minute.
It included other terms, such as the Chiefs picking a member of its ambassador program each season to make two “one-hour appearances” at Don Neron’s promotional events at a Hy-Vee grocery store in the Kansas City region.
The spirits company did not yet have an attorney listed in court records. The company’s CEO did not immediately respond to a request for comment.
An initial hearing in the case has been set for August.
Last year, Don Neron signed a five-year contract with Sporting Kansas City, becoming the soccer team’s official tequila partner.