Is Goodyear's Wingfoot Logo Worth $10 Million to the Cleveland Cavaliers?

Bob Ulrich
Posted on May 18, 2017
Goodyear Chairman, CEO and President Rich Kramer says the partnership with the Cleveland Cavaliers is "a natural fit."
Goodyear Chairman, CEO and President Rich Kramer says the partnership with the Cleveland Cavaliers is "a natural fit."

Goodyear Tire & Rubber Co. has purchased a 2-1/2-inch by 2-1/2-inch position on the left shoulder of Cleveland Cavaliers jerseys for the 2017-2018 season. The Goodyear Wingfoot symbol will fill that space.

Here are some more specifics on the deal, based on my research.

1. Cost. Terms of the agreement were not announced by either the Cleveland Cavaliers or Goodyear. When asked by Modern Tire Dealer, Goodyear said it would not "disclose the financial component of the deal."

"USA Today" reported the cost was $10 million "based on a person with knowledge of the situation."

"ESPN" quoted a marketing group as placing the cost of the logo at $7 million to $10 million per year. Joe Vardon from Cleveland.com reported the Cavaliers will receive "more than $10 million annually" from Goodyear. "Forbes" puts the number at "roughly $10 million per year."

Bloomberg.com estimated the cost at between $5 million and $10 million.

Based on additional research on my part, I estimate the deal at around $10 million per year. That is enough to make Goodyear the official and exclusive tire of the Cleveland Cavaliers, Canton Charge, Quicken Loans Arena and Jr. Cavs.

For what it is worth, ESPN also reported that the Golden State Warriors were seeking $13 million to $20 million for the sponsorship on their jerseys.

2. Length. The Goodyear press release described the Goodyear-Cavaliers partnership as a "multiyear sponsorship." Goodyear seemed reluctant to put a time stamp on the deal when we asked, although allowing advertising on the jerseys is part of what the National Basketball Association calls a "three-year pilot program." The NBA's advertising deals have been known to have opt-out provisions for either side; I believe the deal is guaranteed for two years, with provisions included that could increase or decrease the length of the deal depending on different scenarios. Otherwise, I think the parties would have come out and said the sponsorship was a three-year deal.

3. Kenda's involvement. American Kenda Rubber Industrial Co. Ltd., which does business as Kenda USA, has been a sponsor of the Cavaliers since the 2013-2014 season; that was one year before LeBron James returned to the team. Kenda will remain a sponsor of the team through the playoffs of the 2016-2017 season. The company says it will not be a Cavaliers sponsor next year. The Kenda-Cavs agreement, which was to run through the 2017-2018 season, is being cancelled.

Cleveland is one of six NBA teams with logo deals in place. The others are the Brooklyn Nets (Infor), the Boston Celtics (GE), the Philadelphia 76ers (StubHub), the Sacramento Kings (Blue Diamond Almonds) and the Utah Jazz (5 For The Fight). Bloomberg.com said Infor, a software company, paid the Nets $8 million for the rights.

Related Topics: Cleveland Cavaliers, Goodyear, Kenda USA, sports marketing, Wingfoot

Bob Ulrich Editor
Comments ( 3 )
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  • Newt Futch

     | about 2 years ago

    How does this help gt sell more tires?

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