FLW sues Evinrude

[Central Bassman]

FLW Outdoors issued a press release today to announce it has filed suit in a Minnesota state court against Bombardier Recreational Products (BRP), parent company of Evinrude outboards.

According to the release, FLW Outdoors alleges that Evinrude failed "to pay its agreed upon sponsorship fees for the entire 2009 FLW Outdoors tournament season," and FLW Outdoors has paid nearly $100,000 of Evinrude contingency bonuses to competitors without recompense. The release also noted: "In nearly 15 years of business and tournament operations, FLW Outdoors has never had to sue a single sponsor for failure to pay their sponsorship fees."

FLW Outdoors chairman Irwin Jacobs stated in the release: "FLW Outdoors has had a long-term sponsorship and working relationship with Evinrude as a premier sponsor of FLW Outdoors and its tournaments. In 2009, FLW Outdoors received confirmation from Evinrude officials both in writing and verbally that Evinrude had agreed to the continuance of their sponsorship with FLW Outdoors at about the same level of sponsorship fees for 2009 as they had in 2008.

"FLW Outdoors has fully supported Evinrude's sponsorship throughout the 2009 FLW Outdoors tournament season," Jacobs added. "Evinrude has enjoyed all of the same contractual marketing commitments that FLW Outdoors supported Evinrude with in 2008, including, but not limited to, substantial onsite space for displaying and marketing their products at all tournament locations; Evinrude engines installed on half of all FLW Outdoors/Ranger stage and tournament boats throughout all tournaments; signage throughout all FLW Outdoors tournament locations; television commercials on all FLW Outdoors television programming worldwide; magazine advertising; Internet marketing and advertising; and heavily-promoted Evinrude on all marketing materials and advertising as part of FLW Fantasy Fishing, an international game worth $10 million in cash and prizes. Yet Evinrude has refused to pay FLW Outdoors any of the amounts it promised as consideration for those benefits."

About the payment of contingency bonuses, Jacobs stated: "Not only are we terribly disappointed in the fact that Evinrude hasn't paid any of their agreed-upon sponsorship fees for 2009, but they also haven't paid any of the committed contingency dollars on behalf of their Evinrude pro staff anglers through the 2009 FLW Outdoors tournament season. FLW Outdoors has advanced on Evinrude's behalf almost $100,000 to those Evinrude Pro Staff anglers who had cash commitments from Evinrude based upon their performance this season. To date, Evinrude hasn't reimbursed FLW Outdoors a single dollar for the money that FLW Outdoors advanced on its behalf to the Evinrude Pro Staff anglers."

Although the release referenced the $100,000 total figure for contingency prizes, no money totals were given for the sponsorship package.

The news shocked a fishing industry that's struggling to survive the turbulent economic climate. The boat and motor market has been particularly hard hit and Jacobs, in June of this year, elected to take his boat-manufacturing company, Genmar Holdings Inc., into Chapter 11 bankruptcy protection.

Although FLW Outdoors and Genmar are by law separate companies, Jacobs serves as head of both, and BRP/Evinrude is listed as a creditor in the Genmar bankruptcy owed an outstanding $470,637. It's not known whether that bankruptcy filing might be related to Evinrude's alleged failure to pay FLW Outdoors. However, FLW Outdoors alleges that Evinrude failed to pay for the current tournament season, which began in January of this year, whereas the bankruptcy filing did not occur until 2 months ago.

BRP/Evinrude media relations official Julie Johnson told BassFan the company cannot offer comment at this time due to the pending legal matter.

[JohnMickish]

I was wondering if anyone was going to post that here since this is not a big tournement site but it is worth noting.

Anybody "in the know" on this one here?

[Black_Bay]

Apparently since Ranger is in bankruptcy they haven't paid BRP/Evinrude for engines they've ordered. I'm sure that is the crux of the issue. BRP/Evinrude still owes for their sponsorship though.

[JohnMickish]

BRP wasn't paying it's contingency money long before Genmar filed for protection so I don't know if that is an issue. Ranger and Genmar also use Yamaha and Mercury motors and they are paying their contigency money. Yamaha with the Walleye series and Merc with the bass guys.

I don't know if I can buy the Ranger not paying yet for their motors theory, besides, how many motors can Ranger have from One supplier tied up? I think it's more of a cash flow issue from BRP replacing those 225/250HO powerheads, but that is just my opinion. Anyone have any facts? Seems this issue is abuzz with lots of theories on the 'net but little in the way of facts.

[LMITOUT]

Ranger didn't declare bankruptcy. Genmar did. There is a difference.

[yaggie]

Just for the record Genmar Holdings filed for bankruptcy protection and yes Ranger is a division of Genmar and is included in the filing.

This said the money is still owed. The only out would be if Jacobs has done any type of money transfers between the two companies that he runs.

[ANYFISH2]

Ranger is part of Genmar holdings Inc. and part of the bankruptcy, just like Larson, Glastron, Champion and various other brands. They unfortunatly are going through this mess like the rest of us (I work at Genmar Minnnesota in Little Falls). At this moment all the companies have to wait to get a check through the Bankruptcy court before we can purchase any thing, most commonly motors and windshields. As for Ranger itself and it's debt I have no idea, but the moment the the bankruptcy was filed the banks froze all of Genmars accounts, which left debt unpaid. I highly doubt that has anything to do with this suit.

[Wish-I-Were-Fishn]

Man, this all sucks. Come on Pres, let's do something for the all the hurting businesses out there!!

[hanson]

Sure gives you an icky feeling doesn't it?

I may not know what I'm talking about but after fishing 3 FLW Walleye Tour events this year as a co-angler, I may be underestimating my guess that half the field runs Evinrudes now.

If Evinrude ends up out of this deal, all those pros with Evinrudes hanging on their boats will have to repower to take advantage of contingency money, or have a great sponsorship with Evinrude itself.

I would have to crunch the numbers but it makes sense to me to have a motor on my boat that is going to pay me contingency money.

As a nobody, I'll just watch and learn from what happens here.

[CJH]

Not to be a downer, but this entire industry was setting itself up for a fall. The pricing has gotten so expensive, and people were financing their boats 20 years out. All it was going to take was a down cycle and there were going to be problems.

My father in law bought a Ranger Reata a few years ago, and I couldn't believe how much it cost. It was almost as much as a 3 series BMW!!

[TR21]

So true CJH,

Not only the boat industry but the car industry and housing industry fell prey to the same mistakes. The boating and car industry has to take the lead from the housing industry and lower their prices to sell in volume or they will no longer exist. Very few people will continue to pay 40K for an average auto or 50k for an average boat. Thats just not the way of the world anymore.

[311Hemi]

Very few people will continue to pay 40K for an average auto or 50k for an average boat.

I wonder what would be an above average boat?

....and I thought my used Sportfish was an average boat...it cost roughly 25% of the price mentioned. LOL

[jigginjim]

It does not matter if Irwin is CEO of both companies, Both are list as 2 different companies if evinrude has a bill with FLW. they need to pat the bill. Same as Genmar needs to pay thier bill. Granted it maybe a down turn in boat sales, but these guys need to figure it out. Maybe genmar can trade off stocks in company for moneys owned to BRP?

[CJH]

Yeah, it doesn't matter if they are legally two separate entities.

Depending on how he owns everything it may impact his ability to get credit for his companies, however I seriously doubt he personally guarantees any of it.

[ANYFISH2]

Genmar is privately owned so no stocks to sell, could go public now but in this market and business situation that would not bring Irwin much.

I can only speak on what I have seen at larson/glastron/seaswirl/and fincraft of which we build here in Little Falls. Our smaller Boats 17-21 ft runabouts, fish boats and such just don't have the profit margin to come down much in price (what we sell the boats to the dealers for). To help bring down the price and make the business profitable we all(entire genmar company) took a 10% paycut, lost our company match in 401k, gave up our incentive program to lower our health insurance. We also cut models of boats, and cut nearly 600 jobs in Little Falls alone. It is not that the Company and most likely the entire industry is not trying to fix the situation themselves. We just have to try and make it through until the time comes that people are comfortable buying new boats again.

[TR21]

311 Hemi,

Haven't shopped for a new boat in awhile have you?

It's ridiculous - load up a Lund, Ranger, Triton, Yarcraft, Skeeter or any of the other big names and you end up with a 65K price tag.

Get a well equiped sports sedan and you're looking at 45-50K

And this is in a depressed economy. I just don't get it. I wish these companies can make a nice profit, but you don't have to price gouge. But I guess as long as someone is willing to pay the price for those things, they will charge that price and get it. Oh well, not me!

[yaggie]

I can totally load up a Alumicraft,Smoker craft or a Crestliner in 18.5 foot and keep it under 30,000. My present boat cost me 16,000 new but that was in 1995. Paying double the price 15 years later is not out of line. Most of the people I know who are driving the 50,000 boats got their money from inheritance or from insurance. If the serious tournament people can afford the upper priced boats good for them. I am surprised there are not better deals out there but unlike other industries there is not a huge inventory of end of year models that i am looking at.

As far as the original topic of this thread, I still sence that Evinrude must suspect that Jacobs moved money around his companies to protect it. This is only my opinion.

[JohnMickish]

I fished in the FLW this year as a co-angler a total of 7 days. Of those 7 days I was in 2 boats powered by Opti's, 3 powered by Yamaha 4 strokes and 2 Etecs. Of those 7 different motors only two have had major warranty repair done. Guess which two. I am not knocking any of the motor brands here but if a manufacturer has to warranty alot of it's motors that dries up the money pool pretty fast.

Sponsors come and go in any sport, and in this economy the turnaround is pretty fast with lawsuits everywhere. Yamaha is honoring it's contingency program with the FLW walleye series as is Ranger. All this is going to do is open the door for Merc to come in and be a sponsor. I don't know if Mr. Jacobs will let them in but it might open the door. Who know's maybe BRP will pay up and all will be fine next year??

[311Hemi]

311 Hemi,

Haven't shopped for a new boat in awhile have you?

It's ridiculous - load up a Lund, Ranger, Triton, Yarcraft, Skeeter or any of the other big names and you end up with a 65K price tag.

Yea....I agree with ya....the prices are ridiculous. My main point was your Lund, Ranger, Yarcraft, etc are not average boats.....your talking top of the line boats and that usually has a price tag to go along with it ($50k+). Your Stratos, Crestliners, Alumacraft, etc you can find much better prices new (still out of my price range). No way around it, you have to pay if you want all the nicest features and then adding all accessories drives it up even higher.

I have shopped for boats recently, but I could not afford a new boat and I bought a 02' Sportfish right before opener. I could have bought a heck of a nice boat for 25-30k had it been in my budget. Tell you the truth, I have never bought a new vehicle/toy in my life......don't know that I ever will because of the price tags. Maybe I will hit the lottery Saturday....then I will have a new Ranger in the garage!!

I will stop highjacking the post now!!

[mww24]

It is sad when you hear about people financing boats for 20 years. if you think about it the average house loan is for 30 years. now your paying for a toy almost as long as your house. whats even worse is why would a bank loan money out like that. very poor investment on their part. and they wonder why there in trouble as well. i dont know about this brp thing, but the way everything was going this was bound to happen somewhere.

[CJH]

I think the manufacturers often backed the loans, which is how they were able to finance them out that long. Other than my house, I would never finance anything out that far.

Even if you are talking about a main stream boat as mentioned above is 25-30k, that's still as much as a new Malibu/Camry etc... You can't tell me those boats cost as much to manufacture as one of those vehicles. I know they don't have the same economies of scale as the auto manufacturers, but it sounds to me like there is some fat that needs to be trimmed.

Sorry, didn't mean to hijack the thread. Hope they can all work it out and take the appropriate steps to get back on track!