DICK'S SPORTING GOODS, INC.DKS

DICK'S SPORTING GOODS, INC. Commitments Disclosure

10-KFiled Mar 24, 20212 min read
Commitments and Contingencies
Marketing and Naming Rights Commitments
Within the ordinary course of business, the Company enters into contractual commitments in order to promote the Company’s brand and products, including media and naming rights extending through 2026. The aggregate payments under these commitments were $13.5 million, $15.5 million and $18.0 million during fiscal 2020, 2019 and 2018, respectively.
As of January 30, 2021, the aggregate amount of future minimum payments related to these commitments is as follows (in thousands):
Fiscal Year
 
2021$14,018 
20224,054 
20232,888 
20242,975 
20253,064 
Thereafter
3,156 
Total
$30,155 
Licenses for Trademarks
Within the ordinary course of business, the Company enters into licensing agreements for the exclusive or preferential rights to use certain trademarks extending through 2022. Under specific agreements, the Company is obligated to pay annual guaranteed minimum royalties. Also, the Company is required to pay additional royalties when the royalties that are based on qualified purchases or retail sales (dependent upon the agreement) exceed the guaranteed minimum. The aggregate payments under these commitments were $6.0 million, $11.1 million and $12.1 million during fiscal 2020, 2019 and 2018, respectively.
As of January 30, 2021, the aggregate amount of future minimum payments under these commitments is as follows (in thousands):
Fiscal Year
 
2021$2,208 
20221,250 
Total
$3,458 
Other
The Company has other non-cancellable contractual commitments, including minimum requirements with its third-party eCommerce fulfillment provider, and technology-related commitments extending through 2025. The aggregate payments under these commitments were $49.0 million, $46.9 million and $48.5 million during fiscal 2020, 2019 and 2018, respectively.
As of January 30, 2021, the aggregate amount of future minimum payments under these commitments is as follows (in thousands):
Fiscal Year
 
2021$44,418 
202236,035 
20234,014 
20241,368 
20251,368 
Total
$87,203 
The Company is involved in legal proceedings incidental to the normal conduct of its business. Although the outcome of any pending legal proceedings cannot be predicted with certainty, management believes that adequate insurance coverage is maintained and that the ultimate resolution of these matters will not have a material adverse effect on the Company’s liquidity, financial position or results of operations.

Historical Timeline

Fiscal YearFiled
2021Mar 24, 2021Showing above
2020Mar 20, 2020
2019Mar 29, 2019
2018Mar 30, 2018
2017Mar 24, 2017
2016Mar 25, 2016

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

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