‘In sport, money always wins:’ As bitcoin and crypto soar again, expect another sponsorship run
SPRING IS ALMOST HERE, but is the Crypto Winter over? With bitcoin trading at an all-time high last week, across an industry ever hungry for new sponsorship categories, many were asking if everything old is new again. Will the exchanges on which bitcoin are traded start spending as they did just a few years ago, before some flamed out spectacularly, like FTX, which had its brand on MLB umpires for several seasons, along with a nameplate on the Miami Heat’s home arena? Binance filed for bankruptcy, as did Voyager, which had a large Dallas Mavericks sponsorship. There was also turbulence among some of the NFT and associated blockchain brands, like Socios, which exited the U.S. market last fall. Bitcoin’s ascension to record heights hasn’t gone completely unnoticed across sports. Naturally, there’s still some wariness.
“We were just discussing that,” said Keith Wachtel, NHL chief business officer and executive vice president, global partnerships. “There are still some regulatory issues and concerns. Of course, we’ll continue to do our due diligence. We don’t see anything yet at the league level we are imminently or proactively pursuing. And it’s not just regulation — it’s how comfortable anyone is with those companies now, even if and when there is further regulation.”
SponsorUnited counts 118 crypto brands currently executing some form of sports marketing in the U.S. and Europe. “Still a wide-open category for most properties,” said SU Founder Bob Lynch.
Jason Miller, Excel head of properties, who assisted the Sixers with their Crypto.com uniform patch deal, said he’s expecting a comeback. “A lot of those are funded or at least supported by their bitcoin wallets, and so with bitcoin way up, they’ve got full packets again. Certainly, there will be caution from larger properties, but I still expect a fair number of new deals in the space from brands seeking visibility.”
There’s some evidence that’s already happening. UFC has had a
Crypto.com sponsorship since 2021, which includes prominent kit branding, that remains one of the MMA circuit’s biggest deals. With the recent run-up in digital currencies, “now, we are both looking at ways to expand that partnership actively and aggressively,” said
Grant Norris-Jones, who sells sponsorship assets for both UFC and
WWE as executive vice president/ head of global partnerships for Endeavor’s TKO Group. “And if they’re doing that with us, I am sure there’s that kind of opportunity across the marketplace.”
Just last week, UEFA issued an RFP, soliciting bids from crypto exchanges for the Champions League.
So, is the digital exchange category back fully? There are those reminding us some brands never left.
CAA Sports Co-Head Mike Levine said he’s expecting a relatively active market, especially in the second half of this year.
“The story never told was that a lot of these companies with big sponsorships actually made it through multiple crypto winters before this latest run-up,” said Levine, whose agency assisted OKX with a series of deals, including presenting sponsorship for the Tribeca Film Festival. OKX also has a sleeve sponsorship with the Premier League’s Manchester City, and is primary sponsor for Formula 1’s McLaren team. “The market should come back relatively quickly, but the 2.0 version of blockchain and sponsorship will be one in which functionality is more central to those brand’s successes; for NFTs, it’ll be utility over collectability.”
There are lawsuits still pending and Sam Bankman-Fried
is still in jail. So, can the category ever be fully rehabilitated as far as sponsorships? Or will it forever be typecast as the Spongetech of this decade?
“Additional regulatory comfort certainly would help a lot,” said the NHL’s Wachtel, “but the bigger concern with things like this is always going to be reputational risk.”
“People are getting more comfortable with crypto again,” said industry veteran David Paro, head of global sponsorships for MoneyGram. “It appears like there’s always going to be some degree of volatility in this category as a given. So, deal structure is
going to be fascinating.”
After much club pressure during the last spending spree by digital exchanges, the NFL in 2022 permitted its clubs to do crypto sponsorships. Only two did: the Cowboys with Blockchain.com and the Giants with Grayscale. Socios had more than a dozen NFL team deals. “We haven’t had anyone knocking on our door yet,” said Ravens sales chief Kevin Rochlitz, “but I’d expect more caution on both the sell and the buy sides as it moves forward. And you know with categories like this, the NFL is never in first.”
Chris Voigt, Seattle Mariners SVP of corporate partnerships, said his team received a recent inquiry about a sponsorship. “I would call that unexpected and still very early and exploratory,” he said from spring training in Arizona. “Obviously, there’s some funding on that side now. On our side, of course, you’d look to protect yourself as much as possible in any deal.”
With sponsorships like its naming rights at L.A.’s downtown arena, Crypto.com appears to have built the most brand awareness in the U.S., which leaves a slot open for a No. 2. Count on one of the exchanges jumping on that opening.
“Anyone selling will ask for as much up front as possible and I am sure the [crypto] acceptance piece won’t be as important this time,” said Adam Davis, Two Circles managing director, North America, who negotiated the Sixers/Crypto.com jersey patch deal as chief commercial officer of Harris Blitzer Sports & Entertainment. “This is an industry that generally follows the money. Some years ago, cigarette signs were common at venues and now you have spirits and betting brands in great numbers. In 10 years, we night be talking about THC or hallucinogenics as categories. In sport, money always wins.”
Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.