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June 05, 2017 02:00 AM

Goodyear continues sports marketing investments

Kevin Kleps
Crain's Cleveland Business
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    TNT's broadcasts of the Eastern Conference finals included a wine-and-gold Wingfoot jersey being unfurled from the Goodyear Blimp.

    AKRON—Goodyear is betting a sizable amount, possibly as much as eight figures per year, that a 2.5-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 NBA.

    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.

    "And certainly for us, one of the key elements is to continue to build our top-of-the-line awareness for the Goodyear brand."

    To do so, the tire maker often turns to sports, which accounted for 93 of the top 100 live-viewed TV programs of 2015.

    Klugherz—who said "live sports is DVR-proof"—wouldn't disclose how much of Goodyear's $355 million global ad spend in 2016 went to sports, but it had to be a sizable amount, considering the company's massive presences in varied realms such as college football and auto racing.

    During the 2017-18 NBA season, when teams will first start wearing the sponsorship patches on the upper left of their jerseys, Goodyear's hoops presence will rival its place in the other sports.

    The deal with the Cavs, according to Crain's Cleveland Business sources and various reports, is for $7 million to $10 million per year and extends past the three years of the NBA's pilot program for the jersey ads.

    Eric Smallwood, managing partner of Apex Marketing Group Inc., a sports sponsorship and analytics firm in St. Clair, Mich., has calculated the exposure value of a jersey patch on the likes of James and Kyrie Irving at $22 million to $29 million per year.

    Smallwood bases that value on factors such as star power, team success, home and away attendance, jersey sales, social media, appearances on the popular NBA 2K video game and trading cards.

    The Cavs—who led the league in road attendance in 2016-17, were second in home attendance and are fifth with a combined 15 million-plus followers on Facebook, Instagram and Twitter—check every box in that regard.

    Those metrics, plus three consecutive appearances in the NBA Finals, helped them secure a jersey patch deal that is believed to be the richest of the six that have been announced.

    Still, Goodyear is going to get a quality return on investment, Smallwood said.

    Turner gets a cut, too

    The deal also includes one of the league's two major TV partners in Turner Sports, the first of its kind for a jersey patch sponsorship, and one that allowed the Cavs to accomplish an NBA mandate that Turner — through its TNT cable channel — and ESPN get an opportunity to benefit from such sponsorships.

    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 said.

    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," 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.

    Goodyear

    Cleveland Cavaliers' point guard Kyrie Irving shows off one of the new Cavs jerseys featuring the Goodyear Wingfoot logo.

    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," Klugherz said.

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