As cryptocurrencies rocketed higher in 2021, one trend was crypto platforms and companies that operated in the sector seeing high revenue and growth.
This inflow of money led to some massive sponsorships across professional sports.
With the crypto bear market wiping out companies and growth, could these sponsorships be left in the dust? One large sponsorship has already been pulled, according to media reports.
What Happened: One of the cryptocurrency companies active in sports sponsorships was Crypto.com, which signed a deal to sponsor a sports arena in Los Angeles previously known as Staples Center. The deal comes with a $700-million price tag.
Crypto.com also signed sponsorships with the World Cup that begin in 2022; the Philadelphia 76ers; UFC; and Formula 1 racing, a unit of Liberty Formula One (NASDAQ:FWONA) (NASDAQ:FWONK).
Crypto trading platform FTX has also been active in the sponsorship space, inking a naming rights deal with the Miami Heat’s arena for $125 million. FTX also signed deals with Major League Baseball and several esports-related deals.
The National Basketball Association saw sponsorships from crypto companies increase substantially in the 2021-2022 season. Sponsorships increased from $1.75 million to $130 million from the 2020-2021 season to 2021-2022, according to a report from IEG.
NBA sponsorships from crypto companies include Coinbase Global Inc (NASDAQ:COIN), FTX, Crypto.com, Webull and Socios.
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What’s Next: Crypto.com has ditched a $495-million sponsorship deal with the European Champions League (UEFA), according to a report from SportsBusiness as shared by Decrypt.
The sponsorship would have seen Crypto.com replace Russian gas company Gazprom as the leading sponsor for the league. The report said Crypto.com pulled out of the deal at the “last moment” earlier this summer, and said it was unrelated to the crypto bear market.
The crypto company originally signed to sponsor the league for five seasons at a cost of around $99 million a year.
UEFA cancelled the sponsorship with Gazprom earlier this year after Russia invaded Ukraine. The soccer league has not replaced the sponsorship.
Crypto.com and UEFA did not respond to a request by Decrypt for comment.
Crypto.com is one of several cryptocurrency based companies that has laid off employees.
Comparisons could be made to the large influx of dot-com companies that saw growth and spent large amounts of money on sponsorships when times were good. This included spending money on Super Bowl commercials, another venue that saw a large amount of cryptocurrency companies participate for the first time.
As the cryptocurrencies continue to see a bear market and rough times, companies may have to pull the plug on previously announced or agreed upon sponsorships.
The crypto bear market could result in a cutback in new sponsorship deals across the major leagues as well.
Photo via Shutterstock.
