Does cryptocurrency have the cachet to take on the likes of Anheuser-Busch, Pepsico, Nike, automakers and other big spenders in sports sponsorships, and if so, will it aid in a crypto recovery? That’s unknowable considering where things stand today, but they clearly mean to give it a go.
Among those closely tracking the trend, CoinJournal reported that cryptocurrency sports sponsorships have increased a staggering 7,100% in four years, adding that “in 2021 alone, the top four crypto sports sponsorship deals were worth a combined total of $1.2 billion.”
Money from the sector has been pouring into sports sponsorships in buckets, with Crypto.com’s $700 million deal for naming rights to the venue in Los Angeles formerly known as the Staples Center being the biggest to date.
In a press release announcing the deal in November, the building’s owner, AEG (which owns and operates other big event venues all over the world) said the deal underscored the rapid growth of cryptocurrency and non-fungible tokens (NFTs) worldwide.
“There’s this element of, ‘We need to project staying power,’” Steven Kalifowitz, chief marketing officer at Crypto.com, told Sports Illustrated in February. “…People know that it means something to rename a building. And in that way, we’re communicating without having to say to them, ‘We’re safe.’ Because you can’t do that if you’re not a safe, solid company that’s here for the long term.”
See also: Crypto Sector Expected to Spend Over $160M on Sports Sponsorships in ’22
They weren’t alone, as crypto exchange FTX cut a 19-year deal with Florida’s Miami-Dade County for naming rights to the former American Airlines Arena, home of the Miami Heat.
“This opportunity is more than putting our name on an iconic building,” said FTX CEO Sam Bankman-Fried in a press release at the time. “It is a chance to provide value to the growing and diverse community in Miami and its surrounding cities, as well as join a championship community, a championship organization, and a championship culture.”
Miami-Dade County Mayor Daniella Levine Cava added in the release that the partnership was expected to “earn the county nearly $90 million over 19 years.”
It all sounds like a stretch six months into crypto winter as a deep freeze descends on this asset class, but many experts see sports as a viable conduit for bringing more consumers into the fold.
Bloomberg reported Friday (Aug. 5): “Cryptocurrency companies have committed more than $2.4 billion to sports marketing in the past 18 months, according to data compiled by Bloomberg, all in the name of luring more users to their Web3 world—the decentralized technology they’re billing as the next chapter of the internet.”
As market watchers question whether a malingering crypto collapse jeopardizes these deals, there are already storm clouds gathering. Sports Illustrated wrote Monday (Aug. 1) that the National Women’s Soccer League (NWSL) “is reportedly facing financial difficulties as one of its biggest sponsors, cryptocurrency platform Voyager Digital, has filed for bankruptcy.”
Bloomberg added that the NBA is a major benefactor of this push, noting that “Coinbase committed to spend almost $200 million over four years with the league, according to a person familiar with the arrangement who asked not to be named because the terms are private.”
Read also: Coinbase Sees Record Visits After Super Bowl Ad
That’s in the vicinity of sponsorship spend by Anheuser-Busch, AT&T and PepsiCo, it said, noting that “crypto helped lift the league’s sponsorship revenue 14% last season from a year earlier, to a record $1.6 billion, data from IEG show. Only the tech sector spends more sponsor dollars on the sport.”
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