As cryptocurrency companies seek to reach mainstream audiences, some platforms are spending hundreds of millions of dollars to sponsor sports teams, stadiums and even leagues in a bid to woo new fans.
On Sept. 22, Crypto.com struck an eight-figure deal with the Philadelphia 76ers to sponsor the jersey patch and have visibility in the arena. The crypto trading app will also work with team management to develop non-fungible tokens (NFTs) and create a way for fans to use cryptocurrency to pay for tickets and other products. The Hong Kong-based company will also show up elsewhere alongside the NBA franchise—including on TV broadcasts and various other digital platforms.
Crypto.com Chief Marketing Officer Steven Kalifowitz recognizes that in order to build the brand, he has to also educate consumers about this new asset class.
“Crypto is not just another shoe,” he says. “It’s not a commodity thing or a suitcase or something. Getting into crypto is very much a cultural thing.”
Flush with money from eager investors, a growing number of crypto brands are spending big to reach a mass audience through sports sponsorships and mainstream events. Other deals this month include the cryptofinance company XBTO sponsoring the Major League Soccer team Inter Miami, the cryptocurrency exchange FTX sponsoring Mercedes-AMG’s Formula 1 team and the nonprofit Learncrypto.com sponsoring the English Premier League team, Southampton F.C.
Perhaps sports arenas are not a bad way to go when it comes to finding new fans for a new—and still largely unregulated—asset class that some critics dismiss as gambling and proponents say is the future of the internet as well as the economy. And in a fast-growing and cluttered market, the fight is to get not just recognition but market share.
“To me it looks like an arms race for user acquisition,” says Keith Soljacich, VP/GD of Experiential Tech at Digitas, a leading digital advertising agency. “It’s kind of like if you have a crypto wallet on a platform, it’s a lot like holding a Visa card, too.”
The 76ers deal is just one of many that Crypto.com has landed in the past year while it’s on an aggressive sponsorship spree totaling more than $400 million in deals. Earlier this month, the company became the first official crypto platform partner for the famous French soccer team Paris Saint-Germain. Crypto.com is also a sponsor of a wide range of teams including the NHL’s Montreal Canadians, Fox Sports’ college football midday coverage, UFC, and Aston Martin’s Formula One team—just to name a few. Each of these also includes various other integrations far beyond a logo.
Chris Heck, president of business operations for the 76ers, says the team had been looking for a new jersey patch partner for a couple of years and spoken with hundreds of companies. And because the jersey patch is the most important partnership a team has, it requires brands and teams to be “completely aligned.”
“As the world woke up to the crypto space a little over a year ago, we got a chance to venture down that road,” Heck says. “Think about it this way: Sports are entering into the crypto era world, and we get to the at the front of the line with Crypto.com. These are folks that are partnering with gold-standard brands like UFC, F1, PSG, and we get to be their brand and their of choice in the United States with major sports teams and that’s pretty cool.”
All this to go beyond the current crypto user base to reach the masses: A study Crypto.com conducted in July found that total global crypto users have doubled year-over-year from 106 million to 221 million. However, just a fraction of those are currently the company’s customers.
Earlier in September, FTX—a two-year-old startup also based in Hong Kong—announced a $20 million ad campaign starring football legend Tom Brady and his wife, the model and businesswoman Gisele Bündchen. And like Crypto.com, FTX is sponsoring a wide range of teams and leagues in rapid succession including a five-year deal with the Major League Baseball announced this summer.
“If we just stop at one deal and we’ll wait and see how it does and wait to see how that does before doing another one, the best opportunities might be gone,” says FTX.US President Brett Harrison.
According to Harrison, FTX founder and CEO Sam Bankman-Fried asked for ideas of how do something “that’s big.” Someone then came up with the idea to buy the naming rights for a stadium, and a few months later they won the rights to rename the Miami Heat’s arena FTX Arena in a $135 million deal approved in March.
“There is a group of tech companies that know it in their bones that if they don’t become brands quickly, there is a time in the future where there will be just a few left,” says Jamie Shuttlesworth, chief strategy officer of Dentsu Americas, which became FTX’s agency of record in June.
Traditional advertising methods are important for building trust in crypto brands, according to Harrison—especially since it deals with something like taking care of people’s money.
“When’s the last time you saw an ad for maybe a bank pop up on the top of your Google search and said, ‘Time to move all my money from my Chase account or Citi account?’”
Major stadium and team sponsorships are often held by brands that are already well known, but the crypto sector’s aggressive land-grab feels in some ways like strategies in games like “Risk” or “Monopoly”—where people can either wait for the right properties or buy everything they can as fast as possible.
When asked about the Monopoly metaphor, Harrison joked that “we’re trying plant our pieces on as many Park Places as possible.”
There’s plenty incentive for sports organizations to team up with crypto companies. Mike Proulx, a Forester analyst and marketing expert, said many sports leagues want—and need—to attract the next generation of fans.
“These kinds of deals look to tap into crypto companies’ young skewing userbase with NFTs that are, in a way, a modern/virtual take on old school baseball cards,” he says. “And the benefit to crypto companies is, of course, getting to leverage the league IP that legitimizes their platform with trusted brands while also growing their users.”
The crypto industry has exhausted its original market, says to R.A. Farrokhnia, a professor at Columbia Business School professor and Executive Director of the Columbia Fintech Initiative. However, blockchain technology isn’t something that’s easily explained to the average person—it involves cryptography, complex networks, and other concepts—and also still aren’t to a point where users can easily navigate.
According to Farrokhnia, there are still questions about whether the foundations and interfaces are advanced enough to warrant the aggressive push toward mass adoption. Or, he asks, “are we putting the proverbial cart before the horse?”
“These are all the moving parts in this ecosystem and it seems the pace for innovation has accelerated,” he said. “But are we doing things in the right sequence?”
Farrokhnia also points out the irony that despite all of cryptocurrency’s new innovations, the companies are still using classic marketing models. However, he adds that little for athletes to market unregulated digital economies than to pitch things like CPG products or other brand categories.
“What kind of reputation risk could this have for teams or sports figures or influencers or actors who are engaging in this kind of marketing campaign or activity? Most likely they have good lawyers that would protect them against such things, but you never know.”