At a reported cost of $400 million over 20 years, financial startup SoFi was announced as the naming rights partner for the new Los Angeles Chargers/Rams Stadium, set to open in 2020.
AdWeek reports that despite the eye-popping numbers — the deal is reportedly the richest naming rights agreement in league history — the gambit could help launch the brand to household name status.
“It’s a creative way to get your legacy out where there is going to be buzz,” Columbia University sports marketing professor Joe Favorito told AdWeek. “You’re looking at the most advanced, high-tech stadium in the No. 2 market in the world.”
By stamping its name on the stadium, which has already inked agreements to host the 2022 Super Bowl, the 2023 College Football Playoff, and the opening and closing ceremonies of the 2028 Olympics — SoFi is guaranteeing visibility for itself in association with those high profile events, visibility that would be incredibly expensive through more linear advertising models.
SoFi CEO Anthony Noto, a former West Point football player who served as the NFL’s CFO from 2008 to 2010 told AdWeek that the decision to jump in on the stadium was an easy one.
“We’re going to be associated instantly with by far the largest aggregator of audiences in one event — the NFL,” Noto told AdWeek. ”We’ll instantly have the credibility of being partners with the largest media sports brand in the U.S.”
Of course, naming rights deals don’t automatically secure long-term success for the companies who purchase them, and some question the wisdom of such deals.
“Nobody really knows what the ROI is on these deals,” Smith College economics professor Andrew Zimbalist told AdWeek. “Companies like the idea. They think it’s a good investment, but they don’t know if it’s a good investment at $20 million, $15 million or even $10 million.”
Zimbalist also pointed out that some naming rights sponsors have since gone belly-up.
Still, Noto said that the cost-per-impression of a naming rights deal is an efficient model.
“Everything we did last year in sports sponsorships aggregated about 10-15 million unique viewers over the entire year,” Noto told AdWeek. “We’ll be able to do that in one night when a football game is on national television.”
