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Crypto Winter Chills Sports Sponsorship Spending

Does cryptocurrency have the cachet to rival Anheuser-Busch, Pepsico, Nike, automakers, and other big donors in sports sponsorship, and if so, will it help in a crypto recovery? That’s unimaginable given where things are today, but they clearly intend to try.

Among those following the trend closely, CoinJournal reported that cryptocurrency sports sponsorships have grown by a staggering 7,100% in four years, adding that “in 2021 alone, the top four crypto sports sponsorship deals have a combined value of 1.2 billions of dollars.”

Industry cash has poured into sports sponsorships, with Crypto.com’s $700 million deal for the naming rights to the Los Angeles venue formerly known as the Staples Center being its largest yet.

In a press release announcing the deal in November, the building’s owner, AEG (which owns and operates other major venues around the world), said the deal underscores the rapid growth of cryptocurrency and non-fungible tokens (NFTs) worldwide .

“There’s that element of, ‘We have to project staying power,'” Steven Kalifowitz, chief marketing officer at Crypto.com, told Sports Illustrated in February. “…People know that renaming a building means something. And that’s how we communicate without having to tell them, ‘We’re safe.’ Because that is not possible if you are not a secure, solid company that is there for the long term.”

See also: The crypto sector is expected to spend over $160 million on sports sponsorships in 1622

They weren’t alone when crypto exchange FTX struck a 19-year deal with Florida’s Miami-Dade County for the naming rights to the former American Airlines Arena, home of the Miami Heat.

“This opportunity is more than putting our name on an iconic building,” FTX CEO Sam Bankman-Fried said in a press release at the time. “It’s an opportunity to add value to the growing and diverse community in Miami and surrounding cities and to join a championship community, championship organization and championship culture.”

Miami-Dade County Mayor Daniella Levine Cava added in the press release that the partnership is expected to “bring nearly $90 million to the county over 19 years.”

It all sounds like a six-month crypto winter that has frozen this asset class, but many experts see esports as a viable way to get more consumers on board.

Bloomberg reported on Friday (August 5): “Cryptocurrency companies have committed more than $2.4 billion to sports marketing over the past 18 months, all in the name of attracting more users to their Web3 world, according to data compiled by Bloomberg – the decentralized technology they herald the next chapter of the internet.”

As market watchers question whether a fake crypto meltdown is jeopardizing these deals, storm clouds are already gathering. Sports Illustrated wrote on Monday (Aug. 1) that the National Women’s Soccer League (NWSL) is “reportedly facing financial difficulties as one of its largest sponsors, cryptocurrency platform Voyager Digital, has filed for bankruptcy.”

Bloomberg added that the NBA is a key beneficiary of this push, noting that “Coinbase has committed to spending nearly $200 million on the league over four years, according to a person familiar with the agreement who asked not to be named as the terms are private. ”

Also read: Coinbase Sees Record Visits After Super Bowl Ad

That’s close to the sponsorship spend of Anheuser-Busch, AT&T and PepsiCo, it said, noting that “crypto helped grow the league’s sponsorship revenue by 14% year over year last season to a record 1.6.” billion dollars, data from IEG shows. Only the tech sector spends more sponsorship money on sport.”

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