Crypto's Betting Big on Sports

the sleeves of Rahim Sterling and his teammates. This unassuming logo is part of a twenty million pounder year deal between the football club and the cryptocurrency platform Whale finn and it's a big departure from previous sponsor Yundai, whose branding marked the official uniform for years. Crypto companies have spent more than two billion on sports advertising around the world. The n b A Major League Baseball Formula one. Even

the Drone Racing League has its own crypto sponsor. But in a market downturn, how long will these big investments in sports sponsorships last? And can they persevere through the crypto winter? Today I'm joined by Bloomberg reporter Kimbasin the aggression that they're showing to to compete with everyone else. They want to be seen on the same level. To discuss the return on investment on crypto advertising. Hi Kim, thanks for joining us. Hello, So start by giving us

an overview what's going on with crypto companies in sports. Yeah, so crypto companies have committed two point four billion or more on sports marketing just over the past eighteen months. So that's all kinds of crypto or blockchain related companies and all across sports globally. It's been this avalanche of bending that's entered all kinds of sports leagues across the world. And this is especially interesting for these leagues because it's it's additive. This is new money for them. It's all

additive to their existing sponsorships. So how does crypto compare to other sponsorships, other industries at sponsor sports. Yeah, it's it's interesting how the how these industries work in sports marketing. So it's like they decide to use this as a primary path of marketing for them. So take beer for example, Let's say a beer sponsors contract ends it can be replaced by a new beer sponsor, hopefully at a higher

rate for the league. That's exclusive. All these crypto deals are brand new and they don't bump into anyone else. That means they can compete at the same kind of title sponsor level as everyone else, so they can be comparable like in the NBA, for example, their number two, they're only behind the tech companies in the NBA and in basketball. And are they competing out among themselves like could you have two top crypto sponsors or not? Really has that even presented itself yet? Well, there was a

mad rush at the very beginnings. Eighteen months ago to two years we saw the first sponsorships start to trickle in. There was like Aston Martin's Formula One team and things like that, and tokens for European football teams and and and so on. But the big leagues, I'm sure there were there were fights over who gets you know, the NBA or Major League Baseball and the various biggest teams in the world like the Dallas Cowboys in American Football,

Manchester United and England. These these are coveted properties that that the crypto firms want to get involved with. Are they more aggressive than other industries? Like what are the differences you've seen between crypto and say, like the alcohol industry or the tobacco industry, if that's still a sponsorship that's considered viable. Yeah, to Tobacco's the tobacco's fun. It's it's been a couple of decades since they they played sort of this role of benefactor. And that's what Crypto

is doing right now. If you look back a couple of decades in Formula one, for example, tobacco decided this is our thing. We're gonna spend a whole bunch of money on this, and you saw the cars and race tracks just full of of this tobacco branding. Now Crypto has decided to this is what we're gonna do. This is the way we're gonna acquire new users. So we're gonna just cover stuff in this and in F one in particular, like crypto dot com has its own sponsored race,

the one in Miami. The aggression that they're showing to to compete with everyone else. They want to be seen on the same level as those other industries, and this is how they're gonna do it. And and they're quite new, right compared to the others, totally brand new, just out of out of virtually nowhere. Two point four billion has just arrived or leagues, athletes, teams, and so on. So has any sport been more receptive than others? You think, yes, absolutely.

I think most have become okay with this new industry swooping in. But the last biggest holdout is the National Football League, the biggest sport in the US, and it's an enormous prize because they're normally very slow in allowing these new industries. In the prior ones that they've only recently allowed to advertise and sponsor NFL things is the

sports gambling industry and liquor. They did not allow spirits advertising until just a few years ago, so they're generally reticent for new things, but slowly they've been opening up. So now restrictions are loosening on what teams are and aren't allowed to do with crypto sponsorships, and we're seeing a few deals trickling. So at the same time, we've seen NFL players getting involved right getting sponsorships. We saw

Tom Brady, Aaron Rodgers, So what's the difference there. We just reported that Dak Prescott, he's the court back for the Dallas Cowboys, he signed a multiyear endorsement deal with Blockchain dot Com. Now they already have a sponsor relationship with the with the Cowboys, it's the first of its kind. But most of the NFL teams and the league itself that's all still wide open. That means there there's a lot to pick from as as the rules loosen up.

So some listeners might remember seeing crypto ads during the Super Bowl. So has it paid off? Because those are pretty expensive. Is there a sense of whether it's worth

spending all this money? It just depends on your definition of worth it, right because it feels like it feels like they're using any means necessary that the way we get more users than everyone else is to spend all this money on marketing, and and because it's such a competitive environment right now in user acquisition, this is what

it's going to take. And if ft X and Crypto dot Com as two of the and coin base as three of the larger spenders UH in this space, look at it like this is if they're doing it, then we probably have to do it to That kind of marketing spend is something they could afford, at least until recently. So the Staples Center, which is where the Lakers and the Clippers play was renamed the Crypto dot Com Arena. Is it too soon to say whether we'll get the

same in the in a big NFL stadium. Crypto dot Com is the title sponsor for a ton of stuff right now. So they have the the UFC Formula one. It's about to be a big sponsor at the World Cup in Doha this fall. But the one that really caught the attention of the the American public in particular was the deal to rename the Staples Center where the l A, Lakers and Clippers play. And that's a seven

hundred million dollar deal over twenty years. And that arena had so much history in it over the past couple of decades with Kobe and Shack and and all the championships, culturally iconic things happened there. When people heard of what was it going to be called the Staples Center anymore, they've freaked out that. The fans, the players made comments about it, the coaches. It's a big change. And I don't know we're gonna inevitably there. There's probably gonna be

some other some other stadiums that go this round. There's so many banks that are title sponsors of of stadiums so you know it seems inevitable. Up next, more with Bloomberg reporter kimbas Seen on how crypto sponsorships have been met with both open arms and hesitation in a tale of two footballs, So let's move to soccer, and I will only say soccer these two times before anybody on

the other side of the original cringe. But so we've seen sort of a big spending from crypto there to why is that You're seeing some spending there even now, even in the last couple of months after after the crash, Like there are new deals worth millions with English Premier League teams Everton Manchester City signed of extended one of its one of its deals to it's like practice squad uniforms, so everything is just getting blanket and a lot of

the teams also have tokens. Now it has definitely slowed down, but it doesn't appear to be stopping. So some companies have opted to sponsor football players directly, right, Like Cristiano Ronaldo has a sponsorship with finance, Why would they go down that route? And like how does that potentially clash

with the club sponsorship? Right? Like could that instance ever arise where you're like have to competitors sponsoring the superstar players are you know, brands and businesses in their own right. On the platform's side, you want to have not just like a pitch person, but someone who can who can really carry your whole brand forward. And if you're working with someone the magnitude of Christiano Ronaldo or Tom Brady in the US, and then you're hoping that that will

push you along. In terms of whether they bump up against each other, I haven't seen it yet, so I'm not I'm not quite sure. A lot of times we're saying the word crypto in a very broad sense in that you know the platforms and then like the the n f T services and and so on, they're not directly competing with each other a lot, and these exclusivity agreements may allow them to coexist. But since its alve so totally brand new, I guess we'll just have to see.

You know, prices have been crashing. You were alluding to this before. My first question around this is, do you know athletes still want to be associated with it? Is the appeal of big cash persuasive enough? Like, has there been any change of minds recently or not? Really? If there's money in it for them, They're they're going to

be attracted to it. So as long as there's something interesting to endorse, like we're gonna keep and they have the money to spend and they are willing to to spend those marketing dollars on sports, then we're going to keep seeing these deals. I think what we saw over the past month is TV spend on crypto sports ads just totally dip super far almost aid nothing. And you had ads with Tom Brady for fd X, she had

ads with Matt Damon for Crypto dot Com. All just get taken off the air at least for now, but Dak Prescott's about to be out of the air for blockchain, so we'll see it's going to keep coming. And what about these deals with with companies right, like do you have any sense of whether they paid for them already? Like, are there any risks that someone might not be able to pay up? We saw I think in Italy there

was you know, a rumor. I don't know if it's an actual story yet, but I think there was issues with one club and in the UK as well, where one of their sponsors wasn't able to pay, Like will we see more of that. A lot of these are very long term deals. So you know the Staples Center crypto dot com Arino one is twenty years for example. Some of them are two five. So these are annual payments that are locked in for so long so if

anything happens. But but that's uh, the same with with all sponsors that they signed up for for one year or several years and it becomes an annual payment. But in this case, we have seen a couple things go under. I believe the the n of us L, that's the National Women's Soccer League in the US, one of its sponsors went under, and they were supposed to have Voyager went under. Yeah, yeah, and they were supposed to have payments out to the players that they warned may or

may not still go through. And obviously long term, I don't think that that relationship is going to continue. All right, Thank you so much for joining us. Kim, of course, thank you so much for having me. You can find more of Kim's reporting on the Berg terminal, on Bloomberg dot com and on Twitter. Kim is at at k I M b h A s I N. I'm an erea Bloomberg crypto Senior editor in Today for Stacy Mary

Ishmael on the next episode of Bloomberg Crypto. By some estimates, crypto hacks two have cost the industry close to two billion dollars. That's billion with a B. What could a hack resistant crypto industry look like? And what's taking so long? This is Bloomberg Crypto, a daily podcast from Bloomberg and I Heart Radio. For more shows from I Heart Radio, visit the I Heart Radio app, Apple Podcasts, or wherever

you get your podcast. Send us your comments, questions or suggestions for the show to Crypto at Bloomberg dot net or find us on Twitter. We're at Crypto. The supervising Pretty Stir of Bloomberg Crypto is Vicky Verglina. Our senior producer is Janet Babin. Our producer is Mohammed Faruk. Associate producer is Moses on Them. Associate producer is Thai Bubba Desta wonder At is our engineer. Original music by Leo Sidrin. I'm Stacy Marie Ishmael. Have a great weekend.