Sports marketing

Crypto Companies Spend Over $2.4 Billion on Sports Marketing

Yahoo Finance’s Josh Schafer breaks down a new report that found crypto companies have spent billions on sports marketing.

Video transcript

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SEANA SMITH: Crypto sports sponsorships are making headlines in the down year for the industry. Bloomberg published a report indicating that cryptocurrency companies have committed over $2.4 billion to sports marketing in the past 18 months. Our sportswriter Josh Schafer is here to chat. And Josh, I guess, first of all, when you take that $2.4 billion, that sounds like a lot, but how does that compare to more traditional advertisers in this space, which are some of these automakers What about beer brands?

JOSH SCHAFER: Alright, yeah. So when you really break that down, $2.4 billion is obviously a lot, but we also knew some of that money, didn’t we, when you see that big Crypto.com deal, those big agreements that we have heard of. So really, the cryptocurrency companies, if you take a league like the NBA, they were second in the NBA in terms of sponsorships, but they were behind the technology, which is, obviously, a traditional partner there .

And we can display a table that we have here of top NBA sponsors. You see these names. These are traditional businesses, aren’t they? Pepsi, Coca-Cola, Anheuser-Busch, Nike, Microsoft. Another thing that all of these companies have that crypto can never really get through, Pepsi is a sponsor because of Gatorade, right? And they’re sitting there on the water bottle. Nike is a sponsor because of the jerseys. Microsoft is a sponsor because of the tablets.

Cryptocurrency cannot break into this market, so these companies spend over $50 million per season on these types of sponsorships. Crypto is really fair in this naming rights deal right now and a bit of a jersey. But they don’t really have a real sports use case, Dave.

DAVE BRIGGS: But we’ve learned there’s a cost to that, and I’m not talking in terms of actual money, but what can happen when these things go south, which is Voyager. And you watch the National Women’s Soccer League, and it can go really wrong.

JOSH SCHAFER: Absolutely, yeah. So the National Women’s Soccer League probably won’t get much money from Voyager Digital that was owed to them, that the players were owed. But the other cryptocurrency companies still seem to be active in the space. From what I understand, both FTX and Crypto.com have expressed continued interest in pursuing sports offerings. So I think we’re going to continue to see that number go up, guys, that 2.4 billion.

But what the advertising experts have told me is that it’s not going to grow at the same rate anymore. We kind of saw that top of the market. These companies spent a lot of money. And now you have top dogs like FTX and Crypto.com that are sort of going to fight each other. And some of those little names like Voyager probably won’t be there.

DAVE BRIGGS: Is there a league he is most focused in? Is there a sport they prefer the most?

JOSH SCHAFER: To my knowledge, no. I think you’re going to see a lot of stuff in the NFL this year, because they couldn’t go to the NFL last year, right? So that’s where you’ll notice it the most.

DAVE BRIGGS: So.

SEANA SMITH: Well, yeah, and also– yeah.

JOSH SCHAFER: Last year, teams couldn’t make the NFL.

SEANA SMITH: And more and more professional athletes are also getting on board, aren’t they, with their own NFTs, with their own…

JOSH SCHAFER: Exactly.

SEANA SMITH: –space initiatives. So certainly more and more popular. Alright, Josh, thanks.