Sports offers help crypto projects build communities and drive engagement
The latest trend among crypto projects is sports sponsorship in football, Formula 1, UFC, eSports and baseball. Multi-million dollar investments in sports deals are primarily aimed at building legitimacy and engagements with sports fans. Crypto deals with sports teams and leagues grew more than 100% in 2021 and are expected to reach $5 billion by 2026, according to sports analytics firm Nielsen Sports.
The growth of Bitcoin, Dogecoin, and Shiba Inu coins can largely be attributed to the massive communities behind the projects. Crypto companies have understood the importance of having a large community behind their project. A huge community helps market the project, attract developers of decentralized applications (dApps), raise capital for new dApps, and increase the price of the coin or token through the resulting demand.
In February, Manchester United FC announced a multi-year sponsorship deal with Tezos worth $27 million per year. Under the agreement, Tezos branding will appear on the soccer team’s warm-up shirts before matches. Tezos has also sponsored McLaren Racing which runs Formula 1 and IndyCar teams.
On Friday last week, Manchester City FC announced a sponsorship deal with OKX (formerly known as OKEx) which will see OKX add in-stadium branding to the Etihad and Stadia Academy. This may be OKX’s first sponsorship deal in sports, but it’s also an important indicator that cryptocurrency companies are finding significant value in sports deals.
In Formula 1, Red Bull Racing has a 3-year sponsorship deal with cryptocurrency company Bybit and Tezos as official blockchain partner, Alpha Romeo F1 team is sponsored by cryptocurrency company Floki , the Scuderia AlphaTauri team is sponsored by Fantom Blockchain, the Scuderia Ferrari F1 team has partnered with crypto firm Velas Network AG, while the official title partner of Formula 1 is the crypto exchange, crypto. com.
During February’s Super Bowl LVI, crypto firms FTX Trading Crypto.com and Coinbase spent up to $6.5 million on 30-second ad spots. The most notable deal in basketball is the $700 million Crypto.com deal to rename the Los Angeles Lakers arena to Crypto.com Arena. Crypto.com has also signed a $175 million sponsorship deal with the UFC to see its brand appear on clothing worn by UFC athletes. It was a clear message that crypto firms are ready to spend top dollar to reap the benefits of sports sponsorships in 2022.
Binance, the world‘s largest cryptocurrency exchange, has entered into a number of notable esports deals. Among them, the sponsorship of the TotalEnergies Africa Cup of Nations (AFCON 2021) in January, the sponsorship of the Argentine Football Association (AFA) and the partnership with the Alpine F1 team to build a platform allowing fans to buy non-fungible tokens (NFT). Binance has also sponsored a fan token platform with Italian football club, Lazio.
The sports industry is constantly exploring new synergies with the cryptocurrency space. For example, Manchester City FC is building the world’s first metaverse football stadium to help fans watch matches online. Additionally, sports teams have seen the rise of fan tokens that boost fan engagement and team relationships. Fan Tokens are cryptocurrencies tied to a particular team or league and are used to exchange team-related values such as buying tickets, voting on club matters, offering discounts on merchandise and creating engagement in the fan community. Atlético Madrid, FC Barcelona, Paris Saint-Germain FC, AC Milan, Juventus and AS Roma have already set up fan tokens.
Sports teams have a wide range of youngsters who have been targeted by other unencrypted brands such as Red Bull and Coca Cola for years. The cryptocurrency industry has seen an improvement in awareness and interest from people watching their brand on sports according to the Nielsen Sports Global Sports Marketing Report 2022.