The worlds of cryptocurrencies and sports are now inextricably linked. Scores of football, basketball, racing teams and more have signed deals worth millions with crypto exchanges and crypto betting sites in the past years. But the relationship between the two worlds has not been without its ups and downs, especially following the period of crypto winter that began in November 2022 with the notorious downfall of FTX. This relationship has become a mutually beneficial one: sports organizations needed new influxes of cash after the problematic years of covid when arenas were desolate, and fans were left watching events from the comfort of their couch. On the other hand, crypto projects have used these major sport sponsorship deals to target the public and break through into mainstream popular discourse, at least to some extent. This article will explore the main sponsorship deals between sports organizations and crypto-based entities and will highlight how this relationship will change both sectors in the future.
A wave of deals – some great, others not so much
Most crypto deals have been very lucrative for sports brands and teams over the past years. One of the outstanding examples is the NBA (National Basketball Association), whose various crypto deals helped rake in an astounding $1.64 billion in annual sponsorship fees for the 2021-22 season alone. Binance meanwhile signed deals with Alpine Formula 1 racing team and SS Lazio, who finished second in last year’s Serie A (Italian football championship). But perhaps the largest player in the sports sponsorship sphere has been Crypto.com, who closed major deals for the Italian and Miami Grand Prix, Paris Saint Germain, Serie A, and the 2022 Qatar FIFA World Cup – whose final between Argentina and France in December was watched by an average of 1.5 billion people around the world. They also allegedly paid $700 million for the naming rights to the former Staples Center – where the Los Angeles Lakers and Clippers play – for the next 10 years.
These major deals were, and still are, a whopping success for all parties involved. But not all crypto sponsorships have yielded such great results. Disgraced exchange FTX was, up until November last year, a major player when it came to sports sponsorships. Once the company disbanded, all their deals fell through and they now, for example, owe the Miami Heat NBA team some $16.5 million for the arena sponsorship cancellation.
Fad or Long-Term Opportunities?
As for every industrial category, sponsorship plays a massive role in raking in essential funding when it comes to sport as well. This would suggest that, after a couple of financially unstable years that followed the pandemic for many teams and leagues, crypto sponsorships will play a vital role for these same organizations in the future. However, the recent ‘crypto winter’ saw major crypto institutions like Coinbase and Crypto.com encounter major hardships: in fact, in the third quarter of last year, according to BeinCrypto, saw top crypto sponsors only spend $35 million on advertising, an incredible 80% dip as compared to Q1 of 2022.
Sponsorships in Formula 1 have also diminished, as only 60% of the teams last season had at least one crypto sponsor, as opposed to all the season before. However, crypto sponsorship deals, as indicated above, are still a major part of the industry’s advertising flow. And those same crypto entities doing the sponsorships are certainly liking what they’re seeing. In fact, a piece from the Sports Business Journal recently pointed out that crypto-related sponsorships in American and European sports increased from 55 in 2020 to 419 deals across 173 brands in 2022. Now the recent crypto winter may have somewhat put that number in doubt for 2023, but the trajectory remains clear: as long as the deals are mutually beneficial, this is a relationship that is destined to flower.
