Naming-rights deal for L.A. stadium gives SoFi ‘unprecedented’ assets
SoFi’s $600 million-plus, 20-year deal for naming rights to the Chargers’ and Rams’ new stadium outside Los Angeles includes exclusive ATM branding, broad category rights and other assets designed to make the online lender’s only brick-and-mortar presence a dominant marketing force.
Without physical offices, SoFi executives turned to the record-breaking title deal in hopes of becoming a household name in a matter of years, something its legacy financial industry competitors required generations to accomplish.
“It will redefine what a stadium experience is like, and I recognize that,” said CEO Anthony Noto, who was the NFL’s CFO from 2008-10. “Similarly, I want a partnership that allows us to do something that’s unprecedented. It allows us to have unprecedented assets and benefits, and the terms of the deal reflect that in every regard.”
Along with naming rights, SoFi is a nonexclusive financial services partner to the stadium, with exclusivity in three important sub-categories: mobile/retail banking, lending and payment cards. It becomes an official partner to the adjacent performance venue and becomes a nonexclusive official partner to the Rams and Chargers starting in 2020.
Noto said those cover all of SoFi’s current business lines — checking and savings accounts, student loan refinancing, personal loans, investment tools and mortgages — along with payment cards, which it hopes to launch in 2020.
Also, every ATM in the complex will carry the SoFi brand, the first SoFi machines anywhere. It’s unknown how many there will be.
Under the deal, SoFi gets access to the complex every year for six days to hold its well-attended financial seminars — which draw between 3,000 and 5,000 current or prospective customers — as well as hospitality space for events. The deal does not include project financing.
SoFi has not yet hired an agency to help with its activation plans. Officials expect activations to emphasize SoFi’s digital customer experience. Jason Gannon, managing director of SoFi Stadium and Hollywood Park, said SoFi’s emphasis on digital innovaton was a key aspect of its appeal as a partner.
Noto said the deal first came to his desk in spring 2018, but the two sides were speaking exclusively since about May. Neither side would discuss negotiations in detail, including the price or if other serious bidders were in play. Sources have pegged it at above $30 million annually, a record for the NFL and all U.S. deals that may also approach the $40 million (Canadian) deal Scotiabank signed in 2017 to sponsor Toronto’s biggest indoor venue.
SoFi, with 800,000 customers and a $4.4 billion valuation according to Pitchbook, has developed a reputation for its aggressive marketing spend since SoftBank invested $1 billion in the company in 2016. It now spends at least $200 million annually. “Over the next two to three years, this will be about 10% of our budget,” Noto said.
SoFi won’t alter its marketing mix, Noto said, maintaining 75% on direct-response tactics and 25% on brand awareness. The stadium deal does likely mean SoFi will dial back other sports. It’s sponsored the X Games, the Big East basketball tournament and U.S. Open tennis. “It’s much more efficient and more effective in one sweep than aggregated through a bunch of other events,” Noto said.
In the wake of the SoFi deal, the stadium district rolled out other news that started building the SoFi equity. It confirmed Taylor Swift would headline SoFi Stadium’s opening concert, and then named its first three retail tenants. In August, it announced American Airlines as the naming-rights partner to the open-air entrance plaza to the stadium and performance venue.
“Any NFL facility raises the question of reach versus frequency as far as value, but they will get some big exposure in the first few years with the Super Bowl and other big events,” said Jeff Knapple, chief partnership officer at Elevate Sports Ventures, who sold naming rights to Staples Center and is currently selling field naming rights at Dodger Stadium. “They got the shiny new toy in terms of sports and Los Angeles. Will it have the stature of Jerry World within the NFL world? We’ll have to wait and see.”
Terry Lefton contributed to this report.
Editor’s note: This story is revised from the print edition.