The crypto market fall has made it harder for crypto corporations to enter into new sponsorship deals with sports teams on which they have already spent hundreds of millions of dollars.
The longer the crypto market remains negative, the fewer marketing arrangements with American sports teams are being pursued as crypto firms tighten their belts.
According to a Monday story from the New York Post, cryptocurrency exchange FTX has reconsidered its marketing plan to paint its name and emblem across Los Angeles Angels jerseys. The retractions are most likely the result of the catastrophic market slump.
Another patch arrangement between an unnamed crypto corporation and the Washington Wizards was cancelled soon as the cryptocurrency market began its recent catastrophic decline.
The crypto business in question could have been FTX.US, given the exchange’s nonfungible token (NFT) platform and the Wizards of Washington, D.C., have a long-standing relationship.
According to the New York Post, the partnership with the Wizards was appealing to crypto businesses trying to gain favour with the D.C. political base.
According to Joe Favorito, a sports management expert at Columbia University, no new sports collaborations will be revealed while the market is down:
“What money hasn’t been spent already you’re going to see curtailed — just like we saw during the dot-com bubble.”
During the peak of the previous crypto bubble, crypto firms paid out astonishing sums of money for sponsoring arrangements. Crypto.com paid $700 million to rename the Los Angeles Lakers’ home arena Crypto.com Arena for the next 20 years.
In March 2021, FTX paid $135 to rename the Miami Heat’s home arena FTX Arena. Tezos also pays $27 million a year to have its emblem appear on Manchester United shirts.
There have been dozens of such sponsorship deals totaling hundreds of millions of dollars struck between crypto businesses and sports clubs.
While simple brand exposure sponsorships are being reconsidered, arrangements between real-world items and NFT enterprises appear to be firmly in place, as they provide more tangible benefits to the parties involved.
Last week, global beer manufacturer Budweiser announced a partnership with the popular NFT horse racing platform Zed Run.
Budweiser offered tokenized Clydesdales for users to mint, and Zed Run will debut a Budweiser-themed race track and competition with a top prize of $95,000 in December.
NFL player Tom Brady’s Autograph NFT marketplace has collaborated with ESPN to develop programming for the sports TV network.
Autograph released a parallel NFT collection at the same time as the Man in the Arena: The first Tom Brady docuseries that first aired on ESPN on April 6.