CrossFit Inc., Washington, DC, has reached a settlement with longtime partner Reebok International Ltd., Boston, over alleged unpaid royalties that CrossFit claimed cost it nearly $5 million since 2010. The company also disclosed it is restructuring its CrossFit Games due to costs.
As part of the royalties case settlement, Reebok has paid CrossFit an undisclosed sum, and the companies will continue their partnership, they announced in an Aug. 28 media release.
"Every partnership confronts challenges from time to time," CrossFit CEO Jeff Cain said in the release. "Great partnerships learn from them, overcome them and become stronger in the resolution of them. Our shared resolution is a victory for CrossFit trainers, affiliates and athletes."
A June 14 complaint filed with the U.S. District Court for the Northern District of California claimed that, since 2010, Reebok failed to pay CrossFit approximately $4.8 million in royalties, in addition to failing to meet marketing commitments and funneling potential customers away from CrossFit's online store.
CrossFit and Reebok agreed to a 10-year licensing and sponsorship partnership in 2010, making Reebok the title sponsor of the CrossFit Games and granting the activewear company licensing to sell CrossFit-branded products and apparel.
"We look forward to our continued collaboration with CrossFit," Reebok President Matt O'Toole said in the release. "Our brands are stronger together in the resolution of this dispute, which means great things on the horizon for the CrossFit community."
CrossFit also is streamlining the structure of its annual CrossFit Games competition, citing unsustainable costs, among other complications, according to CrossFit founder Greg Glassman.
“It’s extremely expensive [to host the CrossFit Games]," Glassman told Morning Chalk Up. "Look at the Brazil event. We’re at the venue where the Olympics were held. It cost me over a million dollars, and what comes out of it is two people [advance] to the games. ... The plan is to restructure the company, de-emphasize the [CrossFit Games] … change the very structure of the games to something that’s more sustainable, and fundamentally globalize the games."
Schedule-wise, the CrossFit Games and its CrossFit Open qualifier are remaining intact for 2019, while invitationals and regional competitions will be discontinued, Glassman said.
The five-week-long Open will be moved to October when licensed affiliate competitors will be judged by their respective countries. The male, female and team winners will then receive invitations to the CrossFit Games.
Additionally, from November to June, new CrossFit partner organizations will host 16 officially sanctioned competitions whose winners will also receive invitations to the games.
Glassman told Morning Chalk Up that Dave Castro, co-director of CrossFit's training program and founder of the CrossFit Games, will continue to oversee the games.
“Dave is the perfect person to execute on this vision, the perfect person," Glassman said. "He and I are as close as we’ve ever been.”
The 2018 CrossFit Games were held Aug. 1-5 at the Alliant Energy Center in Madison, Wisconsin.