Two Jazz sponsorship arrangements — in cookies and tech — have recently ended up in court

Lawsuits provide a rare glimpse into the finances of NBA sponsorship agreements.

Goodly Cookies and the owners of the Utah Jazz have reached a settlement in a lawsuit involving the former “official cookie” of the NBA franchise.

Goodly and SEG Basketball last month settled out of court, with the cookie company agreeing to pay $27,500 to the Jazz for an outstanding sponsorship agreement, a Goodly official said.

The court filings — along with a pending lawsuit filed by SEG against another former corporate partner, Wasatch I.T. — offer a somewhat rare look at the sponsorship agreements that provide a revenue stream for professional franchises.

Goodly and Wasatch officials, meanwhile, say the lawsuits are cautionary tales of partnering with one of the state’s highest-profile brands. Executives of both companies said the Jazz misrepresented or simply fell short of what they promised to deliver as part of the sponsorship agreement.

“As a lifelong Jazz fan, I was encouraged by their community involvement and believed that their approach to partnership would reflect these elevated values. However, their ‘you’ll take what we decide to give you and be happy about it’ approach has been completely disheartening,” Wasatch I.T. president Bahar Ferguson said.

The Jazz disagree.

“The Utah Jazz place the highest importance on maintaining strong, mutually valuable relationships with our corporate partners. They are an integral part of our organization. Out of respect for our partners, we do not comment on the details of specific agreements,” Chris Barney, Chief Commercial Officer of the Utah Jazz, told the Tribune in a statement.

“The Official Cookie of the Utah Jazz”

The first lawsuit saw Utah’s “cookie wars” intersect with Utah’s largest professional sports team.

Mark Suleiman is a Nebraska-based businessman who, through his holding company Suleiman Holdings, was an owner-investor in both the Tasty Burger and Goodly Cookie companies.

Tasty Burger was the “Official Burger of the Boston Red Sox” from 2013-2020; Suleiman said that his holding company began looking for a similar opportunity, and found the Utah-based cookie market. In early 2021, Goodly became the “Official Cookie of the Utah Jazz” through the 2023-24 season.

The contract between Goodly and the Jazz specified that the cookie company would pay a total of $365,250 for their 3.5-year arrangement. Goodly Cookies bought 150,000 boxes with the Jazz’s logo, with Jazz approval of the branding, Suleiman said.

Relatively quickly, the relationship began to decline, as detailed in both the SEG Basketball lawsuit, Goodly’s countersuit, and in emails shared with the Tribune.

Goodly alleged that the Jazz, in violation of the contract, did not allow Goodly to sell its cookies throughout Vivint Arena — the company had sales stands in the Vivint Arena concourse, but couldn’t sell its cookies in its clubs and suite levels. Nor, said Suleiman, were the cookies sold at all Vivint Arena events. He also alleges the Jazz did not form a book club with Goodly as title sponsor; and did not publish an agreed-upon number of videos of a social media content series featuring Jazz Bear delivering cookies to fans.

The team also allowed other cookie companies to sell cookies within the arena. Whether or not this was contractually allowed is in some dispute: the contract between Goodly and the Jazz specifies that Goodly will have “in-arena marketing and promotion exclusivity,” but whether that means that other companies cookies can be sold is unclear. Goodly, in its suit, said that Jazz executives verbally told Suleiman they would be the only cookie provider at the arena in selling the package.

Suleiman said his staff later heard rumors about the Jazz working on a deal with another cookie company, Crumbl. Suleiman said he was told that Jazz had found a cookie company willing to pay “three times” what Goodly did.

This season, Crumbl cookies are handed out during timeouts at every Jazz game by a “Crumbl Crew.”

On May 20, 2022, the Jazz sent Goodly a letter indicating their intention to terminate their sponsorship agreement within 30 days, which was an agreed-upon contractual provision. In addition, they asked for $85,000, which they said was the unpaid balance of Goodly’s contract.

Last month, the two sides agreed to a settlement which saw Goodly pay $27,500 of the $85,000 the Jazz sued for, according to Suleiman. The company still has 90,000 boxes with the “Official Cookie of the Utah Jazz” verbiage, which they cannot use.

“My story is a cautionary tale of what happens when a young billionaire buys a professional sports franchise and doesn’t vet the people within his newly acquired walls. Ryan Smith doesn’t need a Qualtrics survey to know the ongoing problems with the Utah Jazz organization are systemic, unapologetically flippant and downright predatory,” Suleiman said in a statement. “Every corporate partner deserves to know how Smith Entertainment Group, and the senior leadership they offer quarter to, chooses to operate. Every partner should know their active team sponsorship agreement isn’t the shield or the sword they expected. There are real people at the other end of these Utah Jazz partnership agreements — the Jazz have a fiduciary duty to do more than look for SEG’s next payday.”

Wasatch I.T. troubles

Meanwhile, Wasatch I.T. had more dollars at stake in their sponsorship contract, agreed to in 2021.

Their contract specified they’d pay $1,182,188 total over the course of three full seasons for annual rights to two third-row Jazz season tickets, plus six upper bowl tickets, plus $3,500 of ticket credit per season; a minimum of 21 in-arena videoboard features, of three different types; named “Sponsor of the Night” privileges for one Jazz and one Stars game, with 18 additional club or lower bowl tickets for that game, along with various radio, TV, social media, and in-arena advertising on that night.

In addition, Wasatch I.T. would receive 40 30-second commercials on Jazz TV broadcasts; other social media posts, and a small-business networking event.

While Ferguson says that Wasatch I.T. had other problems with their sponsorship, both parties seem to agree that the key disagreement between the two comes down to how important a contractually-obligated networking event was. The contract says that the Jazz will provide “One customized pre- or post-Utah Jazz game VIP networking event to be jointly determined by the Advertiser and the Utah Jazz.”

Ferguson, the president of Wasatch I.T., says that the networking event was key to the whole sponsorship from their point of view — essentially allowing the Wasatch I.T. to make relationships with other Jazz season-ticket holder and sponsor business owners, in hopes of selling their services. But the team said, in its lawsuit, that it wasn’t able to provide a networking event during the 2021-22 season due to the pandemic. (Ferguson disputes this notion, saying the Jazz simply didn’t have such an event planned for any point during the season.)

“As a business-to-business company, relationships drive our growth. The VIP event was designed as a vehicle to create connections with the right people. It served as the pinnacle event following various brand awareness activities throughout the season. This event was not just important, but an indispensable part of our agreement,” Ferguson said.

The 2022-23 networking event therefore took on additional importance, but by both parties’ accounts, they had different visions for what would occur. The Jazz say they wanted the event to be a post-game, on-court event with Jordan Clarkson, but Wasatch I.T. wanted the event to happen off-site, to control the guest list, invitation verbiage, and the M.C. of the event.

It was that final point, the Jazz’s lawsuit alleges, that was the final straw of the disagreement. In this case, it was Ferguson who asked to end the sponsorship, and the Jazz agreed — but with the two parties disagreeing on how much of the balance was still owed. SEG Basketball filed the lawsuit against Wasatch I.T. on March 24, suing for $129,709, the amount they say Wasatch I.T. underpaid them for the 2022-23 current NBA season.

Wasatch I.T. has not countersued, but Ferguson said they plan to “respond” to the Jazz’s lawsuit in some manner.

Editor’s note: This story has been updated to note Suleiman’s status as a former, not current, owner of the Tasty Burger company.