Reports said that the longer the crypto market stays in bearish territory, the more marketing deals with American sports teams are being taken off the table as crypto firms tighten their belts.
It has been reported that crypto exchange FTX has been rethinking its marketing plan to plaster its name and logo across Los Angeles Angels jerseys, according to a Monday report from the NY Post. The dramatic market downturn is likely to blame for the retractions. Another patch deal between an undisclosed crypto firm and the Washington Wizards was axed just as the crypto market began its violent tumble in recent weeks.
However, the crypto firm in question could have been FTX.US as the exchange’s non-fungible token (NFT) platform and the Washington, D.C.-based Wizards have an ongoing partnership. The NY Post said that the deal with the Wizards was desirable for crypto firms looking to curry favor with the D.C. political base.
Joe Favorito, the Sports Management Professor at Columbia University, said:
“What money hasn’t been spent already you’re going to see curtailed — just like we saw during the dot-com bubble.”
The report said that during the highs of the last crypto boom, crypto firms shelled out staggering amounts of cash for sponsorship deals. Crypto.com paid $700 million to name the LA Lakers’ home Crypto.com Arena for 20 years. FTX paid $135 to name the Miami Heat’s home arena FTX Arena in March 2021. Additionally, Tezos is paying $27 million annually to put its logo on Manchester United uniforms.
Thus, there have been dozens of other sponsorship deals between crypto firms and sports teams worth hundreds of millions of dollars. While the sponsorships for basic brand visibility are being re-thought, the deals between real-world products and NFT firms appear to be firmly in place as they deliver more practical benefits to the parties involved.