Sports driving Goodyear's marketing push

AKRON — Goodyear is betting a sizable amount, possibly as much as eight figures per year, that a 2½-inch square patch on the Cleveland Cavaliers' redesigned jerseys next season will be a worthwhile investment on a team with as much global appeal as almost any in the National Basketball Association.

While the regional ties between the Cavs and the Akron-based tire manufacturer are important — and made for an interesting story when the two organizations announced a jersey patch sponsorship on May 15 — the deal goes well beyond the area where Cavs' star LeBron James was raised.

"For Goodyear, this relationship has to be bigger than just two Northeast Ohio companies," said Seth Klugherz, Goodyear's director of North American marketing.

Turner Ignite, the company's in-house sports marketing agency, is tasked with bringing the gold Wingfoot patch "to life through storytelling," Matt Hong, Turner Sports' chief operating officer, told Crain's Cleveland.

The first example aired during TNT's Game 1 broadcast of the Eastern Conference finals on May 17. That night, as the Goodyear Blimp hovered over a Quicken Loans Arena watch party, a graphic showed a wine jersey with a gold Wingfoot logo being unfurled from the blimp.

"You'll see more and more of that," Mr. Klugherz said.

The jersey patch is the headliner, and the TV ads are catchy, but the three-way deal involving the Cavs, Goodyear and Turner is a complicated one that, according to sources, includes various other assets that ensure the Akron company and the Cavs remain partners for quite a while.

The contract also features a suite at Quicken Loans Arena, season tickets, courtside and midlevel LED signage in the arena, a position at the front of the arena's basket stanchions, a presence in the organization's youth basketball initiatives and other community-related assets.

For such deals, the team assigns a value to the jersey patch that is lower than the total amount of the deal. Once the amount is approved by the NBA, the league will take half of it and eventually divide it evenly among the 30 clubs.

The overall deal, however, is classified as basketball-related income, which means that the players, after deductions such as hard costs associated with the deal are taken off the top, get 51 percent of the pie.

Another beneficiary is Turner, which, according to sources, gets media spending from Goodyear that could increase over time. By looping in a league partner very early in the process, the Cavs were able to keep two key parties — Turner and the NBA — happy.

"When the league first announced this program, Goodyear was used as the model," Cavs CEO Len Komoroski told Crain's Cleveland after the deal was announced.

Thirteen months, and many twists and turns later, it came to fruition.

"More driven" is a Goodyear tagline. "More sports" seems to be an essential part of its marketing plan.

"As this (media) shift is happening and Goodyear is strong in live sports, working with Turner — a broadcast partner of the NBA with lots of reach and lots of fans — it was only a natural," Mr. Klugherz said.