Crypto Winter, Digital Asset Firms Suspend Sports Sponsorships

As the cryptocurrency bear market continues and crypto companies continue to tighten their belts, more US football team sponsorship deals will be canceled.

Cryptocurrency exchange FTX has been rethinking its marketing plan to put its name and logo on Los Angeles Angels jerseys, the New York Post reported on June 20. The sharp decline in the cryptocurrency market may have been the reason for the withdrawal of these plans.

Just as the crypto market has begun to plummet in recent weeks, another patch agreement between an undisclosed crypto firm and the Washington Wizards has been canceled.

This crypto company could be FTX.US. Because the exchange's NFT platform has maintained a partnership with the Washington, D.C.-based Wizards. The New York Post stated that the deal with the Wizards is very worthwhile for encryption companies hoping to please the political base in Washington.

Columbia University sports management professor Joe Favorito told The New York Post in an interview that he doesn't think any new sports partnerships will be announced during the market downturn.

"You're going to see money that hasn't been spent being cut — just like we saw during the dot-com bubble."

At the height of the last crypto boom, crypto companies paid outrageous sponsorship fees. Crypto.com spent $700 million to acquire the naming rights of the Los Angeles Lakers home arena for 20 years and named it Crypto.com Arena. In March 2021, FTX named the home of the Miami Heat as FTX Arena for $135 million. Additionally, Tezos pays $27 million a year to have its logo printed on Manchester United jerseys.

Dozens of sponsorship deals worth hundreds of millions of dollars have also been struck between crypto companies and sports teams.

While crypto companies have had to rethink sponsorships of basic brand awareness, deals between real-world products and non-fungible token (NFT) companies appear to be solid as they offer more tangible benefits to the parties involved .

Last week, global brewer Budweiser partnered with popular NFT horse racing platform Zed Run. Budweiser has issued tokenized Clydesdales that users can mint, while Zed Run will feature a Budweiser-themed track and a $95,000 tournament in December.

NFL superstar Tom Brady's Autograph NFT marketplace has partnered with sports TV networks like ESPN to create content for the sports TV network. On April 16, around the same time ESPN premiered the documentary Men in the Arena: Tom Brady, Autograph launched a parallel NFT series.