Is cryptocurrency sport’s new GOAT?
Crypto has made a champion’s entrance into global sport. As it breaks into competitive arenas ranging from Formula One to football, sporting organisations are adopting crypto in various ways. Whether it’s paying players in digital currency or donning stadiums and team apparel in the colours of a crypto platform, sport seems to be going all-in on cryptocurrency. But why is crypto so keen on sport sponsorship, and how does it benefit both sides?
Crypto sponsorships open revenue floodgates
Crypto sponsorships burst onto the scene in 2021, with dozens of major deals signed to the tune of hundreds of millions of dollars. As crypto extends its reach around the world, industries like sport are being positively impacted by revenue streams created by digital currencies.
GlobalData sport analyst Patrick Kinch says 2021 was a landmark year for sport’s relationship with crypto. With 49 new deals secured between crypto brands and sport rights holders, 2021 closed twice as many deals than 2020.
What’s key here isn’t just the uptick in sponsorships, but the value attached to each signing. New agreements in 2020 were worth $12 million in annual value compared to 2021’s $107 million – almost a ninefold increase.
Kinch believes the future is looking bright for the relationship between sport and crypto, as more opportunities for high-profile signings become available, like a shirt sponsor for Serie A side Juventus, and a title sponsorship for the Champions League.
“With growing share prices and increasing consumer interest, it may not be long before we see crypto firms appearing as the chief partners of the biggest properties in world sport, from the Olympics to European soccer clubs.”
Crypto.com, for example, has signed multi-year deals with both Formula One and the Ultimate Fighting Championship (UFC), collectively worth over $300 million. On average, Crypto.com is tapping into over 80 million pairs of eyes for every Formula One event, and a further 1.1 million for every UFC match across several continents.
Stateside, the Super Bowl has become one of the biggest single-day events in the world for crypto players to invest in. With 117 million viewers, crypto companies can spend up to $7 million for a 30 second advert at half time.
Crypto exposure is getting the full 90 minutes + extra time
With each deal comes an enormous amount of exposure for crypto, and with that the hope of greater understanding for and adoption of cryptocurrency. A Morning Consult poll indicates that sports fans are about twice as likely as non-sports fans to say they’re familiar with cryptocurrencies like Bitcoin and Ethereum.
Ben Ziffren is the director of business development at Wasserman, a leading sports marketing agency, and he says sport’s interest in crypto grew tremendously in 2021.
“We’ve seen a combination of new companies that are coming up in this space and are very crypto-focused, and some more traditional companies in the financial services space that now have this as an additional offering,” says Ziffren.
As consumer awareness around crypto remains in its early stages, Wasserman’s senior vice president Zack Sugarman believes crypto platforms are “not scared by big, big sponsorship dollar amounts,” to get exposure, with some deals spanning as long as 20 years.
“These brands need massive awareness and they need legitimacy,” says Sugarman. “That’s where these properties can capitalise by providing high-visibility assets on TV, on social [media], on jerseys.”
Morning Consult research also suggests why sport has become such a popular arena for crypto exposure, with each generation of fan having their own way of consuming sports. While millennials are more likely than the general population to identify as sports fans, Generation Z are less likely to do so. Instead, Gen Z sports fans are most likely to give their allegiance to individual athletes over teams.
“The benefit of working with athletes is how effective they are at bringing this to a younger generation,” says Ziffren. “The role that athletes play in doing that is undeniable.”
Whether it’s a sports team donned in the colours of a crypto platform, or an individual athlete endorsing cryptocurrency, each gives exposure to the space like never before.
Scoring in crypto
“Pay me in bitcoin,” NFL star Russell Okung tweeted in May 2019. A little over a year later, Okung gave his followers an update that read: “Paid in Bitcoin.”
Since then, crypto has swept across the NFL and several more players including Cade Cunningham and Trevor Lawrence have either been receiving payment in cryptocurrency or converting portions of their salary to Bitcoin.
Sean Culkin, another NFL player receiving his salary in Bitcoin, says he is using cryptocurrency as a means of financial security. “I fully believe Bitcoin is the future of finance and I wanted to prove that I have real skin in the game—not just trying to make a quick buck.
“As athletes, our days on the field will come to an end; our playing days are such a small window of time relative to our overall life,” says Culkin.
Up to 78% of NFL players go broke within two years of retirement as cash flow dwindles and expenses increase, and Culkin says he wants to protect himself from becoming part of this statistic:
“I take pride in the fact that I’ve been very smart with my money. [Bitcoin] is a monetary network that allows individuals to be their own bank and protect their savings from the inflationary environment the world operates in today.”
By sharing investment decisions across social media platforms, players like Okung, Lawrence, and Culkin are motivating people to add Bitcoin and other cryptocurrencies to their portfolio, and are helping them consider a space they might not have otherwise researched further.
What does the second half look like?
Having experienced such seismic growth in the past few years, crypto’s influence in sport was inevitable. Such a steep rise in adoption means salaries and transfers made in Bitcoin and other cryptocurrencies are likely to become commonplace. With a series of title sponsorships soon drawing to a close, will we see an influx of crypto-based firms signing deals to brand stadia and sport shirts?
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