The skid that resulted in the wipeout of $270 billion of the cryptocurrency market’s value eased Friday — but industry insiders still expect the crash to have at least some impact on the sports world.
The big three crypto exchanges — Crypto.com, FTX, and Coinbase — have committed hundreds of millions of dollars to partnership deals with major sports leagues and teams over the last several months. The exchanges take a percentage of each trade, so when the price of a cryptocurrency dips, so does the cut made per transaction.
Industry experts interviewed by Front Office Sports don’t expect the sponsorship deals with the major exchanges to be in trouble. But the pace of new partnerships had slowed before the crash, and the volatility is expected to further hamper future deals.
Blockchain Sports Bonanza
Web3 — which includes NFTs like those traded on NBA Top Shot — has been a boon for sports.
- Crypto.com signed a 20-year deal worth $700 million to take over the naming rights of Los Angeles’ Staples Center in November. It also has long-term, nine-figure deals with the UFC and Formula 1.
- FTX agreed to a 19-year, $135 million pact for the naming rights to the Miami Heat’s arena.
- Coinbase inked a multiyear deal to become the exclusive cryptocurrency exchange of the NBA, WNBA, and NBA G League.
“Crypto.com remains fully committed to its sports sponsorships,” a company spokesperson told FOS. “We are well-financed, and these are multiyear contracts, which will continue to play a crucial role in our mission to accelerate the world’s transition to cryptocurrency.”
