The Only Constant Is Change: Balancing Multiple Interests to Make LAFC Work

Larry was named the MLS club’s co-president in March 2021, having served as chief business officer since 2014. Under his leadership, LAFC has sold out every MLS home match in its history, while LAFC and Banc of California Stadium have received numerous awards, including being named one of the Best Employers in Sports by Front Office Sports, and nominated as a finalist for Sports Business Journal’s Sports Breakthrough of the Year and Sports Facility of the Year.

Larry, MLS’s 2019 Doug Hamilton Executive of the Year, joined the All Access Interview Series and host Jim Andrews to dive into trends in media and brand partnerships, as well as to explore the challenges and advantages of LAFC’s business model.

Jim: In addition to dealing with all of the other changes the last year and a half has brought, LAFC has had major turnover in your jersey partnership and your major media partnership, plus you are looking for a new stadium naming rights sponsor. For your TV deal, some might say you bucked a trend in moving from a streaming service your first three years in YouTube TV to traditional TV broadcasters in your new agreement. Can you discuss the reasons for that move?

Larry: I don’t think we’re experiencing anything that other clubs across sports aren’t experiencing, which is the fact that things are more fleeting and longer-term relationships are harder for brands to commit to as they work through their lifecycles and their needs, desires and objectives change.

YouTube TV was a great partner, a great brand for us to put on the front of our jersey when we launched in MLS. The brand awareness they received for being on our first-team jersey, and the impressions that drove across all kinds of media platforms, was really valuable to them as an early-stage platform that was an alternative to over-the-air TV, cable, Dish and DIRECTV. But as we got to the end of the three-year relationship and they looked at what was moving the needle for them as a more mature platform, and what their needs were going forward, there were more cost-effective ways to drive subscriptions. The brand awareness had been established. I’d like to think it was only us, but they did sponsor that little thing called the Fall Classic—the World Series—a few times as well.

On balance, for three years they were a great partner for us. We think we delivered for them and they delivered for us, but we totally understand why they decided that scaling down in the partnership was the right thing for them to do. They are still a partner, just not one of the top two partners we have.

As far as how that impacted our English-language local broadcast, in fairness I think we are much better off now. As an expansion club in the very crowded market that is Los Angeles and an emerging brand trying to capture people’s attention, we feel we have a chance to reach a much broader audience now having a local broadcast on Bally Sports SoCal and also doing our weekend games on KCOP13, which is part of the Fox family, than when we were behind a paywall on an up-and-coming platform.

Even though we may be bucking the trend where everyone’s unplugging, we feel like this is a better place for us to be in our lifecycle as a club.

Jim: Your corporate partnership roster has a lot of names that are not the usual suspects we might expect to see on jerseys or in stadiums–Flex, Nectar, Postmates to name a few. Was it a deliberate strategy to go outside of some of the traditional categories, or is that more or less serendipitous?

Larry: I would love to tell you that we’re just that smart, but we are not unique in that we are always looking at the usual verticals or industries—your beverage partners, your auto partners, your airline partners, financial services and banks—but you also have to be looking at emerging brands.

What’s interesting with a lot of these nontraditional brands is that everyone is measuring everything now. It’s no longer about hanging signs and assuming it drove business, especially with online advertising, social media platforms, curated partner content that we create together and push out on our channels—and they repurpose on their channels—and the ability to put out email blasts to our ticketholder base, or our broader mailing list, and have the ability for the recipients to click through.

What’s resonating with brands is that they want to engage with our fan base and they know we have an incredibly passionate and loyal fanbase even though we are only in our fourth season. When we get into these discussions, they want to understand how best to engage in the same way we built the club: street by street, block by block, one by one, individual conversations and relationships.

So take a brand like Flex which is launching their battery-powered power tools. They know there are people in our supporters section—the 3252—and everywhere else in our building who are tradespeople and they want to connect with those folks. That lends itself a bit more to the nontraditional partners.

Jim: Fan data is obviously critical to running any sports and enterprise, and there are number of different strategies that teams and clubs are taking to sourcing and using data. I’m curious to hear LAFC’s approach.

Larry: The number one thing that we have done is partner with far and away the most robust ticketing platform on the planet, our good partners at Ticketmaster. Ticketmaster was pushing digital ticketing before anyone else. That enables us and other venues to identify more individuals who are in the building and that is the most important thing you can do.

You may find out that someone you just identified has actually been coming for years, but you didn’t know it when they had a paper ticket given to them by a friend. At the same time, you may learn that someone has four season memberships in a premium club space but they never come. They are flipping the tickets every match. We know they’re not just giving them to friends because they are listed on TM Plus and we see where they are going.

It’s about tracking and matching. Through our good partners at Fanatics on the merchandise side we know who is buying LAFC hats, scarves, jerseys, jackets and warmup pants. We can identify someone who has bought all of that—is clearly a fan, lives locally—but has never been to a match. We have to fix that! Same with the reverse: people who come to all the matches but we don’t see them buying merch. How can we curate an experience for them so we’re doing better on the merch? Same thing goes with food and beverage. With electronic payments you can follow people around in a Big Brother fashion that’s a little scary if you think a lot about it, but in order to really move the needle on the business, these are the things you have to do.

We can create a more tailored experience that makes the fan feel, “Hey, these guys care.” Plus, the ability to know that a ticketholder’s last three vehicle purchases were pickup trucks can help our friends at Ford sell them an F-150. Or when we know we have a fan who historically buys country music concert tickets at venues in LA, we can let them know early that there is going to be a presale opportunity.

I don’t know that we’ve had any recent conversations with a brand about coming on as a corporate partner that has not involved some level of a detailed dive into what are the actual demographics of the fanbase—not just what percentage is male vs. female. It’s important that the brands see the potential in that overlap between who they view as their customer and who they can reach.

Jim: LAFC as a business is not just an MLS team. You own Banc of California Stadium and you need to get paying customers into the venue on many more dates than just the 17-20 matchdays. That puts you in a different situation than some of the other teams in the league, who are able to put all their energy into running a soccer team. But are there advantages to having this larger entity in terms of what you can offer corporate partners or LAFC members?

Larry: Yes, we are a different animal relative to a number of other clubs in MLS. Some are tenants in NFL stadiums, some are in stadiums where the other content is less than in our situation. Also, we built Banc of California Stadium with our owners’ money, not public money, so the only way the economics work is if we activate as close to 365 days a year as possible.

We purposely designed the stadium to be as conducive to touring musical acts as possible. One of the only things we kept from the Los Angeles Memorial Sports Arena that used to sit on the site was the ramp that allows semi-trucks to have a similar experience as when the crew pulls into the Staples Center, Great Western Forum or Madison Square Garden. We have our own staging solution and our own rigging solution to make it seamless for those acts to come in.

We built club spaces that can be used for sit-down dinners and corporate meetings with a podium and AV. We can host a film shoot, a commercial shoot, a movie shoot. In addition to all the sporting events, we’ve had parties on the field, TV show premieres, movie premieres, charitable balls, you name it, we’ll do it!

It definitely provides something extra to corporate partners, especially those in the consumable categories like Heineken, Pepsi and others that see their products being used not just for those 17-plus matches. It certainly makes a difference to the brands we talk to that we’re not just talking about the LAFC fanbase.

Jim: You have an interesting and diverse ownership group and I would love to hear how you leverage them—whether it’s the well-known personalities such as Will Ferrell and Magic Johnson, or the sports business executives like Rick Welts and Brandon Schneider, or the private equity and venture capital guys.

Larry: For me and the other folks on the executive team, it’s incredible to have those kinds of resources to provide advice and guidance and to just deliver. The credit goes to Peter Guber because he is just masterful at the way he pulls these groups together. The idea is everyone is in it because they want to be in it; they have personal attachments. Will Ferrell grew up playing soccer. His wife played collegiate soccer. His sons play club soccer. He loves the game. It’s not a gimmick.

The idea with the group is depending on the expertise and the availability of the individual, they know they are going to get a phone call. It’s a different frequency; I can’t call Magic Johnson every day and ask him to show up somewhere or give us a sound bite. But he’s been unbelievably gracious with his time, whether it was the announcement of our stadium site, the ground-breaking, or the ribbon cutting. He took part in our jersey unveiling event, which we did on Zoom with some frontline workers this past Spring. The same with Nomar Garciaparra and Mia Hamm. They’re not available every day, but they love the club and when there is something specific that they are just the right people for, they are there and they deliver.

Unfortunately for them, if you’re Brandon Schneider at the Golden State Warriors or your Lon Rosen at the Dodgers, you get a call from me almost every day! Because as an executive running a sports organization in a big market, why wouldn’t I call Lon, who only sells four million tickets a season at Dodger Stadium? The same with what Peter Guber, Joe Lacob, Rick Welts, Brandon and Kirk Lacob have done up north with the Warriors and Chase Center.

When we need advice on technical matters, Chad Hurley, who is a founder of YouTube might be a good person to ask. Or if we have questions about a particular vertical or industry, or who we should be talking to, who better than Benchmark Capital partner Mitch Lasky, who has invested in Uber and Snap, or Larry Berg, our lead managing owner or Bennett Rosenthal, one of our co-managing owners—both of whom are in the private equity space.