Crypto firms are reportedly cutting their sports-related advertising and sponsorship spend as winter continues to bite into the markets.
Many crypto companies – including Crypto.com and Coinbase — reacted to a sharp decline in crypto prices and trading volumes by announcing that they would reduce the size of their workforce.
And after a start to the year in which companies spent big on plum TV ad slots, including Super Bowl ads, US outlets such as the New York Post and Wall Street Journal reported. that the big companies have now cooled off on new sponsorship deals. .
The Post quoted the Colombia University Sports management professor Joe Favorito said he would be “shocked” if any new major crypto sponsorships were agreed “during the current downturn.”
The same report cites “sources with direct knowledge” of the matter as stating that the crypto exchange FTX had “withdrawn from talks to provide a jersey patch” on the uniforms of major league baseball (MLB) franchise Los Angeles Angels “those last weeks”.
Last year, FTX paid $135 million for the naming rights to the stadium NBA crew miami heat.
The same “sources” also claimed that another patch deal – this one between the NBA franchise Washington Wizards and an unnamed “crypto company” had also been “eliminated”.
The report noted:
“The Washington Wizards patch was seen as particularly desirable for crypto companies since politicians and regulators who oversee the space attend their games.”
Favorites added:
“What money hasn’t already been spent, you’re going to see it cut back, just like we saw during the dotcom bubble [of the late 1990s].”
The outlet did not suggest any companies were currently looking to pull out of their existing deals, but warned that problems could arise if they did.
In November last year, Crypto.com paid $700 million for the naming rights to the Los Angeles sports center which hosts both the LA Lakers and the LA Clippers.
The outlet quoted sports pundits as saying that if Crypto.com wanted to walk away from its 20-year deal with Los Angeles sports franchises, the crypto company “would be liable for a colossal sum of $385 million.” .
Chris Lencheski, a formerComcast executive and adjunct professor at the aforementioned Columbia University, was quoted as saying:
“There is always a negotiated possibility of getting out. But it must hurt.
Crypto.com and Coinbase both “splurged” on Super Bowl LVI ads in February this year, with the latter paying some $14 million for its one-minute halftime ad.
Last week crypto exchange BinanceChangpeng chief “CZ” Zhao seemed keen to show that he had made sound decisions on the crypto sponsorship and advertising fronts as his business continued to grow despite the market slump.
Binance is the main jersey sponsor of the Italian football club Naples, Nevertheless. The company paid around $32 million to become the club’s title sponsor in October 2021.
A potential deal involving a major crypto exchange remains on the table at the six-time European champions liverpoolalthough that seems increasingly unlikely given market conditions.
Liverpool city rivals, FC Everton, however, seem ready to counter this trend. The crypto casino operator Stake.com have signed a deal which will see the company become EFC’s main shirt sponsor in an undisclosed ‘club record’ deal, the Liverpool Echo have reported.
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Learn more:
– Ukrainian crypto exchange reportedly close to sponsorship deal with FC Barcelona
– Chelsea secures first crypto shirt sponsor in $24m deal
– Crypto Sports sponsorship moves into the fast lane with OKX F1 Deal
– Liverpool FC Mull offer to ditch TradFi for crypto firm in shirt sponsorship deal
– Binance CEO eyed Abramovich’s Chelsea
– Crypto.com marks the World Cup
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