Crypto winter freezes sports sponsorships for digital asset firms

Blockonomics
Crypto winter freezes sports sponsorships for digital asset firms
Changelly



The longer the cryptocurrency market stays in bearish territory, the more marketing deals with U.S. sports teams as cryptocurrency companies tighten their belts.

Cryptocurrency exchange FTX has been reconsidering its marketing plans to put its name and logo on the Los Angeles Angels jerseys, the New York Post reported on June 20. A sharp market downturn could be to blame for the withdrawal.

Another patch deal between an undisclosed cryptocurrency firm and the Washington Wizards was called off just as the cryptocurrency market began to tumble violently in recent weeks.

The crypto company in question may be FTX.US, as the exchange’s NFT platform has an ongoing partnership with the Washington, D.C.-based Wizards. The New York Post said the deal with the Wizards is desirable for crypto companies looking to curry favor with Washington’s political base.

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Joe Favorito, a professor of sports management at Columbia University, told the New York Post that he does not expect any new sports partnerships to be announced during the market downturn.

“You’re going to see a reduction in money that isn’t being spent — like we saw during the dot-com bubble.”

At the height of the last crypto boom, crypto companies paid staggering cash for sponsorship deals. Crypto.com spent $700 million to name the Crypto.com Arena, home of the Los Angeles Lakers, for 20 years. FTX named FTX Arena, home of the Miami Heat, in March 2021 for $135. In addition, Tezos pays $27 million a year to put its logo on United’s uniforms.

There are also dozens of sponsorship deals worth hundreds of millions of dollars between crypto companies and sports teams.

While sponsorships for fundamental brand awareness are being reconsidered, deals between real-world products and non-fungible token (NFT) companies appear to be firmly in place as they bring more tangible benefits to all parties involved.

Global brewer Budweiser partnered with Zed Run, a popular NFT horse racing platform, last week. Budweiser has issued tokenized Clydesdales that users can mint, while Zed Run will launch in December with a Budweiser-themed track and tournament with a top prize of $95,000.

RELATED: F1 Monaco GP: Bybit’s Red Bull Racing NFT, Crypto F1 Partners & More

NFL superstar Tom Brady’s Autograph NFT marketplace partners with companies like ESPN to create content for sports television networks. Autograph has launched a parallel NFT series that coincides with the “Man in the Arena: Tom Brady” documentary series premiering on ESPN on April 6.

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