The crypto market fall has made it harder for crypto firms to make fresh sponsorship arrangements with the sports teams they invested hundreds of millions of dollars in at the beginning of the year.
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 June 20 New York Post article, FTX has reconsidered its marketing strategy to plaster 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 unnamed crypto firms and the Washington Wizards was canceled just as the crypto market began its latest catastrophic drop.
The cryptocurrency firm in issue could have been FTX.US, given the exchange’s NFT platform and the Wizards of Washington, DC, have ongoing cooperation. According to the New York Post, the Wizards arrangement was appealing to crypto businesses trying to gain favor with the DC 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.
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 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 nonfungible token (NFT) corporations appear to be firmly in place, as they provide greater 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 released tokenized Clydesdales that users could mint, and Zed Run will debut a Budweiser-themed race track and a 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. On the same day that the “Man in the Arena: Tom Brady” docuseries premiered on ESPN, Autograph released a comparable NFT collection.