The current downtrend in the crypto market has had a negative impact on financial institutions, especially those dealing with digital currencies.
Currently, some companies are starting to feel the heat from a different angle. This involves sponsorship deals between these digital currency companies and sports teams. This is especially true for crypto companies that have already spent hundreds of millions of dollars on the matter.
Crypto winter begins
As of 2021, news is that many digital currency companies are investing billions of dollars in sponsorship of sports. These companies had believed the same would happen in 2022, only to wake up at the dawn of a crypto market downturn.
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Certain digital currency companies have recorded losses as the crypto winter approaches. This led them to make some tough decisions, such as cutting costs and headcount. In addition, companies that have ventured into large sports deals are finding ways to stay afloat. Therefore, there is a need to reduce costs.
according to Report, digital currency exchange FTX has withdrawn a jersey patch for the MLB Los Angeles Angels. This happened a few weeks ago and saw the digital currency market slump. Judging by the news, however, FTX spent $135 million in March 2020 to rename the home of the Miami Heat.
The source cited another example of invalid transactions due to the collapse of the cryptocurrency market. This involved a patch deal between a cryptocurrency company and the NBA’s Washington Wizards. Many crypto companies consider the Washington Wizards patch desirable.
This is because the regulators and politicians who oversee their games are more often present. However, the parties (Washington Wizards and FTX) did not respond.
Going a step further, Joe Favorito, a professor of athletics at Columbia University, issued a statement on the situation. Judging by his presentation, no sports partnerships or sponsorships will be announced until the bulls take over the market.
Furthermore, it was revealed that during the last bullish market trend, a lot of money was poured into sponsorship deals.
Some examples of crypto companies cited are Crypto.com, FTX, and Tezos. For example, sources noted that Crypto.com offered about $700 million to name the home of the Los Angeles Lakers for nearly 20 years. Also, as mentioned, in March 2021, FTX provided $135 million. This is to replace the name of the home of the Miami Heat with FTX Arena.
Turn to Tezos, which provides $27 million a year to maintain the logo on Manchester United’s kits. However, current market trends have not changed the firm deal between NFT companies and real-world products. This means that related parties can still receive certain benefits.
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One example is Golden brewer Budweiser, which has partnered with the famous horse racing platform Zed Run. Another source example is Tom Brady’s Autograph NFT marketplace in partnership with ESPN. Again, the idea is to develop significant content for sports TV networks.
Featured image from Pexels, chart from TradingView.com