Crypto Calls Timeout from Sports

In today’s edition of the Front Office Sports newsletter, we’re taking a look at how the fallout of the crypto crash is affecting sports-related sponsorships.

Crypto Companies Hit Brakes on Sports Deals Amid Crash

Cryptocurrencies have crashed in value since late last year, and the fallout is impacting sports sponsorships.

Two high-profile deals between teams and crypto exchanges have reportedly?fallen apart?due to the value drop, according to the New York Post.

• In the past few weeks,?FTX?suspended talks with the?Los Angeles Angels?on a jersey patch deal.
• A patch deal between a crypto company and the?Washington Wizards?was also scuttled. With crypto companies spending heavily on lobbying, the Wizards, who play in the nation’s capital, are considered especially valuable real estate.

The prices of bitcoin and ethereum, the two most valuable cryptocurrencies, have respectively dropped by?69.1%?and?76.7%?since their November peaks.

Shopping Spree Stopped

The pullback comes after a period when?crypto companies poured billions into sports?sponsorships.?

FTX and Crypto.com both inked high-profile arena naming rights deals, with FTX securing the Miami Heat’s home in March 2021 in a 19-year,?$135 million?deal, and Crypto.com landing the arena of the Los Angeles Lakers, Clippers, Kings, and Sparks, in a reported 20-year,?$700 million?deal in November.

Crypto.com would reportedly have to pay?$385 million?to pull out of the naming rights deal.

In the 2021-22 NBA season, crypto companies?jumped?to the second-biggest spenders — with $100 million to $150 million in sponsorship deals — after placing 43rd the previous season.

Conversation Starters

• Sports betting operators including DraftKings and FanDuel have requested New York legislators to change laws regarding current sports-betting tax rates.
• Hear about the day's most important business of sports stories in five minutes or less by listening to our daily podcast The Leadoff.
• The Kansas City Current have opened their new $18 million, privately-funded training facility, which is believed to be the first women’s pro soccer-specific facility in the world.
• The cost of the 2020 Tokyo Olympics reached $10.5 billion, or 1.42 trillion Japanese yen, according to the Games’ organizing committee.
• Fanatics CEO Michael Rubin is selling his 10% stake in Harris Blitzer Sports & Entertainment, which owns the Philadelphia 76ers and the New Jersey Devils.

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