The Amerian Arbitration Association granted MDA's request to terminate contract with Schwinn.
VENICE, Calif. — The companies whose partnership was synonymous with Spinning are no longer working together.
Mad Dogg Athletics (MDA) and Johnny G, owners of the Spinning program and trademark, announced that their six-year relationship with Schwinn has ended. In a press release, MDA stated that the American Arbitration Association (AAA) granted MDA's request to terminate its contract with Schwinn, which had been an MDA licensee that manufactured the Johnny G Spinner.
At press time, Club Industry was unable to reach MDA President/CEO John Baudhuin for comment. However, the release included a quote from the MDA executive, who stated, “Schwinn's financial and management difficulties — and subsequent bankruptcy — have strained our business agreement and limited facilities' ability to procure bikes and parts for months now. Terminating our contract enables us to get back to the business of providing Spinning training and Spinner bikes to facilities in the U.S. and abroad.”
The release went on to report that MDA plans to produce and deliver Spinner bikes by December or January. “We will be honoring all existing orders and licensing agreements,” Baudhuin said.
Shortly before MDA announced the contract termination, Direct Focus — parent company of Bowflex and Nautilus — purchased Schwinn Fitness in a bankruptcy auction. Kevin Lamar, Direct Focus' president, said that his company never assumed on having a relationship with Mad Dogg. He explained that, during the due diligence process, his company knew that the MDA/Schwinn contract was unassumable.
“What is unclear and ambiguous about [the MDA press release] is that they have dissolved relationship with the estate, which is the bankrupt Schwinn company,” Lamar said. “They never had a relationship with the new Schwinn company, which is Nautilus, Schwinn Fitness and Direct Focus.”
Lamar added that the terminated contract benefits the new Schwinn company, which, at press time, expected to unveil a new indoor bike and program at Club Industry 2001 in Chicago.
“We anticipate on being very good competitors of Mad Dogg,” Lamar said. “[Schwinn has] manufactured the bike for Mad Dogg for a number of years, and the new [Schwinn] company will continue to be a large manufacturer of cycles around the world. We think this is a good thing for the new company, Nautilus/Schwinn Fitness, because it doesn't depend us on a third-party company. We're going to bring this in-house, and we think we're going to be in great shape.”