The rumors that have been flowing for many months have been confirmed. Leading fintech company, SoFi, has acquired naming rights to the new NFL stadium being built in Los Angeles. The stadium, opening in 2020, will be home for NFL teams the LA Rams and LA Chargers. The company announced the decision in a blog post yesterday.
While SoFi would not comment officially on the amount they are paying, Bloomberg is reporting that SoFi is paying more than $30 million a year over 20 years. This is supposedly a record deal for naming rights for a sport stadium and the new stadium will be the most expensive ever built.
In this interview on CNBC SoFi CEO Anthony Noto said that the annual cost of the naming rights will be less than 10% of their total marketing budget and less than 5% of their overall budget. SoFi will be the only private, venture backed company with their name on an NFL Stadium. Noto has a history with the NFL serving as their CFO ten years ago, so he has experience being on the other side of the negotiating table during discussions for naming rights for NFL stadiums. This should have helped him in this negotiation.
The new stadium will be called SoFi Stadium (yes, it already has a Wikipedia page) and it will host the home games of both the LA Rams and the LA Chargers. In addition to these NFL games the stadium will host Superbowl LVI in 2022, the college football national championship in 2023, potentially some World Cup soccer games in 2026 and the opening and closing ceremonies of the Olympic Games in 2028.
While $30 million is a lot of money to pay every year for the naming rights to a stadium, I am not a marketing expert so it is difficult for me to make an informed opinion on the merits of this decision. I did like that Noto said this was a decision that was based an data and analysis and he believes there is a great ROI to be had here. I do think it is surprising that a relatively young company decided to make such a big commitment at this stage of their development.
But in some ways this could be a good thing for all of fintech. It legitimizes not just SoFi’s brand but potentially others as well and could actually help lift the entire neobank category. As consumers get used to dealing with digital brands for their finances I could see them trusting SoFi as well as some of their prominent competitors.
SoFi has a history of bold marketing moves. They have done two Superbowl ads but this latest move is their boldest yet. Time will tell if this was a good decision but it will certainly elevate SoFi’s brand in the mind of millions consumers.