Nats among teams bitten by crypto collapse

Last week, the Washington Nationals posted a tweet that read: “Crypto 101. You have questions. We’ve got answers.”

An accompanying video included frequently asked questions about cryptocurrency, asked and answered over a baseball highlight reel. One big problem, though, was that cryptocurrency was in free fall, spurred by the collapse of Terra, the sponsor of the social media posts and the Nationals’ most visible brand partner in 2022.

Fans quickly expressed anger with their favorite team pushing a plummeting cryptocurrency to its Twitter following of more than 780,000. The tweet was scheduled in advance, according to multiple people inside the organization, who also said that Terra’s collapse is stirring tension about how to proceed with the partnership.

The Nationals signed a fiveyear, $38.15 million deal this winter to promote Terra and received all the money up front. The internal debate, according to multiple people with knowledge of the discussions, is centered on whether the organization should honor its agreement with Terra and keep the company’s name on its luxury club behind home plate, where “Terra” is stripped across every seat, and elsewhere in the stadium.

As the fallout from Terra’s crash continues, the Nationals’ predicament highlights the potential pitfalls for athletes, teams and leagues that have tethered their brands to the volatile digital currency.

The terms of the Nationals’ contract with Terra include naming rights to its premier club, signage around Nationals Park, big-screen advertisements and continued promotion on the Nationals’ official social media accounts. In announcing what they called a “groundbreaking partnership” with Terra in February, the Nationals said Terra “has experienced a meteoric rise as a market leader through its blockchain and DeFi [decentralized finance] ecosystem.” The team called itself “leading innovator in Major League Baseball.”

But that was when TerraUSD was trading at $1. By Friday, it had fallen to less than seven cents, in what crypto market analysts call an irreversible implosion. A spokeswoman for the Nationals, whose owners are exploring a sale, declined to comment on the partnership or the ill-timed tweet. Terra did not respond to a request for comment.

As cryptocurrency boomed in recent years, sports has been one of its favorite targets for advertising. Dozens of companies, including the three largest trading platforms, spent hundreds of millions of dollars looking to turn sports fans into new customers.

Crypto.com inked a 20-year, $700 million naming deal for the former Staples Center in Los Angeles, home of the Lakers and Clippers, and is the jersey sponsor of the Philadelphia 76ers. The Miami Heat’s arena is now called FTX Arena. Coinbase is the exclusive crypto sponsor of the NBA and WNBA.