Wednesday, July 17, 2024

NC trend: Innovator Ally Financial scores on the soccer field

Illustration by Noel Heil

When the new Charlotte Football Club stunned everyone with the largest crowd in the history of Major League Soccer on March 5, the most prominent corporate logo on the team’s uniforms and many fans’ jerseys was that of Ally Financial.

Not Bank of America, Truist, Lowe’s or other corporate giants that dwarf Ally in size.

But taking the chance to become the chief corporate partner of billionaire investor David Tepper’s club was in sync with Ally’s effort to take distinctive approaches to business and marketing. The company has become a strong digital financial-services company from the ashes of General Motors Acceptance Corp., which needed a federal bailout to avoid closure in 2008.

Ally announced its soccer partnership with Tepper’s organization in 2019, before the Charlotte FC name was revealed in July 2020. The company pursued the effort because of a corporate commitment to be a positive force in Charlotte and to connect with local soccer enthusiasts, company officials say. Key decision-makers were CEO Jeff Brown, a longtime Charlottean, and Andrea Brimmer, whose work as Ally’s chief marketing and public relations officer has earned industry acclaim.

Ally’s risk included an estimated $7 million sponsorship fee, which involved jersey naming rights for an undisclosed period of time. Such branding is common in professional soccer globally but has been frowned upon by other major U.S. pro sports leagues.

“It’s an exciting time to be investing in soccer in the U.S.,” says Michael Edwards, an associate professor of parks, recreation and tourism management at North Carolina State University. “Ally certainly sees that, particularly in terms of their brand identity trying to be a game-changer in the banking industry. Their approach to online banking is certainly something that’s different in the marketplace, so I can see the appeal for them to want to be aligned with Major League Soccer. It represents an emerging sport in the U.S. sports landscape.” 

Soccer’s relatively young, diverse fan base is viewed by Ally as a good alignment with the company’s efforts to attract more youthful customers seeking deposit and loan accounts with the digital-only business. It is also the banking sponsor for the National Women’s Professional Soccer League.

Ally’s investment in Charlotte FC, which was first reported by Charlotte Business Journal, compares with a $15 million, three-year deal that LendingTree signed with the Charlotte Hornets of the NBA in 2019. Other key founding partners for Charlotte FC include Centene, a Clayton, Mo.-based medical-insurance company building a big local office, and Atrium Health. 

Ally spun out of GMAC, the former financing arm of the Detroit-based automaker that rebranded in 2010. Since then, Ally has diversified into various personal and corporate banking niches. Operating without branches, Ally Bank has attracted more than 2.4 million digital customers with about $140 billion in deposits.

The company reported a $3 billion profit in 2021, nearly tripling its net income from a year earlier. It employs more than 10,000 people with many of its top executives based in Charlotte, including Brown, a former senior Bank of America executive who moved to Ally in 2009 and became CEO in 2015.

Charlotte FC chartCharlotte’s status as a growing community popular with sports-minded millennials and Generation Z also appealed to Ally. The city’s population is nearing 900,000, having soared 20% since 2010. It’s not unusual for Carolina Panthers and Charlotte Hornets home games to be filled with transplants supporting the visiting team because of long-term allegiances built with their former hometown favorites.

But Charlotte FC came out of the chute with much local loyalty, reflected in the initial 1-0 loss to the Los Angeles Galaxy that attracted 74,479 fans. More than 20,000 season tickets were sold with prices ranging from $630 to more than $2,000. The team is also the first MLS team to require personal seat licenses that cost $450 to $900. MLS teams play 17 home games in a season. 

Those are among the most expensive prices in the MLS, which was founded in 1993 and struggled for years to attract significant corporate and fan support. Tepper’s willingness to spend $325 million to buy the Charlotte franchise was widely viewed as a huge endorsement of the league’s long-term potential. (He bought the Panthers for $2.27 billion from founding owner Jerry Richardson in 2018.) 

Ally CEO Jeff Brown
▲ Ally CEO Jeff Brown

MLS also considered placing a franchise in the Triangle, where several business leaders mounted a strong campaign. The Raleigh-Durham region is a well-known hotbed of soccer because of the success of the N.C. Football Club youth program and UNC Chapel Hill women’s team, which has won more NCAA championships than any other school. 

But Tepper’s wealth and aggressive approach won the slot for Charlotte. 

“We have a great young coach, a brand new team. This is a great town for this sport at this point in time. It’s going to be fun,” Tepper said last year.  

Several Ally executives are former soccer players or serious soccer fans. But company officials say the real stars are fans who started a social-media campaign and hashtag several years before the city landed the MLS franchise, drawing attention to the sports’ popularity in the Carolinas.

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