Cryptocurrency firms have figured out lately that sports event sponsorship is an effective marketing opportunity, but now they have reported ditching them.
Last year, it was like some common trend where cryptocurrencies and related companies put huge capital into different sports events sponsorships. A lot of deals were signed between sports clubs and crypto firms, resulting in a win-win situation for both. But this year, the similar trend seems not to be followed by the same passion; rather, those signed deals are being canceled now.
Seems like the year 2021, when crypto firms were flooding money into advertisements, has now dried up with the funds. This is quite evident looking at the companies seeking cost-cutting in the wake of an ongoing market crash, which also includes stopping the flow of money towards the sports deals. Recently several instances of prominent companies backing off from such sports deals have been reported.
A sports deal that was supposed to be signed off between major crypto exchange FTX and its favorite baseball team MLB’s Los Angeles Angels canceled out when the crypto exchange pulled itself out of the talks. It’s definitely because of the recent market crash, as there is no point for a crypto exchange company that signed a $135 million deal with the Miami Heat basketball team in March last year to back off from a deal.
Another deal got canceled as per reports between a crypto company and the NBA’s basketball team, Washington Wizards. As far as the deal with Washington Wizards is concerned, this is said to be one of the desirable areas for crypto companies, given that most politicians and regulators who generally overlook the crypto space attend their games.
However, no official comments from the team and crypto firms have been disclosed. But the sources having knowledge on the matter of both the deals said that this cancellation could be seen as a result of a market slump.
Professor of Sports Management at Columbia University, Joe Favorito, considered this a shocking instance if any crypto firm shows up to sign off a massive sponsorship deal in a currency market downturn. He said that the money that could be spent on such deals and sponsorships could be lost amidst the market crash, just like during the dot-com bubble.
Source: https://www.thecoinrepublic.com/2022/06/21/are-ftx-and-other-crypto-firms-backing-off-from-sports-deals-due-to-the-market-crash/