The Vancouver Canucks organization has won a near-million-dollar settlement against office and camera equipment retailer Canon Inc. for breaching a sponsorship deal.

In its lawsuit, the NHL team argued that Canon backed out of a five-year sponsorship arrangement under which the hockey organization would buy its office equipment from Canon, and Canon would retain its preferred-supplier designation, along with advertising and other sponsorship benefits.

But the team said Canon terminated the negotiations before a formal sponsorship agreement could be signed. Negotiations started in the summer of 2008 for a deal worth more than $1.7 million over five years, based on a prior, similar agreement in place from 2003 to 2008, according to court documents filed in B.C. Supreme Court.

Canon did not dispute the breach of contract, which was evidenced by a series of emails in 2008, but argued the value of the deal was closer to $700,000.

Justice Jeanne Watchuk, writing in a judgment released May 16, ruled that Canon owes the Canucks $826,987 for the difference between the Canon deal and a deal later reached with Xerox, once it “became clear to the Canucks that Canon would not honour the sponsorship agreements and the Canucks no longer attempted to persuade Canon otherwise.”

The $905,000 deal with Xerox was not as favourable, and the team sought damages in court for the lost cash revenue, the lost retail discount offered by Canon under the original terms, and lost advertising revenue on the so-called “power ring” and “score clock halos” displays in the Rogers Arena. The power ring sells for $20,000 per minute, and the score clock halo at $15,000 per minute.

The team administration was unable to re-sell some of the ad space during the 2009-2010 and 2010-2011 seasons, according to the court documents.

Under the agreement, Canon would pay the Canucks $320,000 annually for ad space in the hockey rink and team publications, as well as season tickets. The NHL team would lease Canon office equipment for Rogers Arena.

When the 2008-2009 hockey season started, “all of Canon’s sponsorship benefits were fully activated and in operation,” Watchuk wrote in her judgment.

A concern arose in December over a clause that Canon’s legal team feared would allow the Canucks to terminate the equipment deal prematurely, causing Canon to lose its financing. Despite the team’s offer to remove the clause, the deal was dead.

zmcknight@vancouversun.com