Key Takeaways:
When Crypto.com signed a $700 million 20-year deal to rebrand Los Angeles’ iconic ‘Staples Center’ as the ‘Crypto.com Arena’, it sent shockwaves throughout the industry. Not only was the 2021 deal one of the most lucrative in sports history, but it was also the first time that a blockchain company had done anything so bold and high-profile.
This significant step forward into the public domain should have paved the way for other crypto companies to move into mainstream marketing, but Russia’s invasion of Ukraine shortly afterwards presented a setback, both in terms of crypto trading volumes and global reputation. Leading crypto exchange FTX filed for bankruptcy, losing its $135 million deal to rebrand Miami’s ‘Kaseya Center’ as the ‘FTX Arena’, while crypto brokerage Voyager was hot on its heels, leaving the National Women’s Soccer League, of which it was a major sponsor, facing severe financial difficulties.
For those who have survived, however, sponsorship deals are the future. Crypto.com has gone on to sign several more lucrative deals, and by 2022 PYMNTS were reporting that cryptocurrency sponsorships had increased by an estimated 7,100% over the past four years, with the top four crypto sponsorships worth a combined $1.2 billion.
While crypto sponsorship is entering its heyday, the gambling industry is not faring nearly so well, suffering setbacks at every level from sports fans, the media and governments the world over. Such is the pressure that the English Premier League has now agreed to ban betting companies from taking shirt sponsorships deals from the start of the 26/27 season. Against this backdrop, a gap in the sponsorship market is unavoidable: so will the cryptocurrency industry now jump on this opportunity? We at CoinJournal compare the two sectors:
Sources: FT, Cryptimi, Hypebeast, CNBC, Yahoo
Looking at the most valuable deals, one brand clearly dominates: Crypto.com is alone responsible for $975 million from the top five. Added to this, the industry giant also sponsors the FIFA World Cup, advertises at the Super Bowl, and has partnerships with the French team Paris Saint-Germain and the South American football confederation, Conmebol.
While Crypto.com is leading the field, others are likely to make strides within the coming years. Nielsen’s 2022 Global Sports Marketing report projects that blockchain investment in sports sponsorship will reach $5 billion USD by 2026, with a 778% increase in crypto sponsorship. The result will be dominance of three out of the four largest sectors: retail, energy, and IT. In comparison, the closest rival – the automotive sector – is expected to see sponsorship growth of just 5% by 2026.
Cryptocurrency companies are proud of their sponsorship deals: promoting them to the world through press releases and ad campaigns. Gambling sponsorship, on the other hand, tends to be much more low-key, with deal values often kept under wraps. Nevertheless, the sector had 864 active sponsorships across 39 sports globally in 2022 and these are rumoured to be some of the most lucrative.
Sources: SBJ, Sports Mediapro, football.london, gamesbras
These deals are not as eye-catching as those within the cryptocurrency sector, but the difference is not always as great as it might seem. Bet365, for example, is rumoured to spend an eye-watering $100 million on sponsorship deals, but their strategy is to spread the total across a multitude of football teams and sporting events. Similarly, William Hill is estimated to spend some $60 million, centring its sponsorship on horse racing and football events that evoke heritage.
While the gambling sector has long been a mainstay of sports sponsorship, times are changing. Its sponsorship share recently fell from 15.3% to 8.1% across football, rugby and cricket, driven by poor performance in the football industry. With professional sports feeling the pressure to demonstrate social responsibility and protect young fans, the continuation of this decline seems inevitable.
By contrast, the phenomenal 1,100% increase in crypto sports sponsorship deals between 2019 and 2021 saw the industry catapulted into the limelight.
However, Phil Hoey, Director of CoinJournal, believes the challenge now facing cryptocurrencies companies is not only to build brand awareness, but also to convert that into business by encouraging new users to take a step into the unknown. That’s something that sports sponsorships might be able to help with: “For most of the general public cryptocurrency still remains both new and unfamiliar territory. However, these lucrative sponsorship deals show that crypto is making strides to enter the public consciousness. If this continues, it won’t be long before its branding dominates sports shirts and stadiums the world over”.