FTX implosion to hit crypto sports sponsorship
FTX's collapse is expected to prompt a major pullback in sports sponsorship deals with the crypto space, which was among the biggest spenders of any category.
Why it matters: Few have spent more sponsorship dollars in sports than crypto during the last few years.
By the numbers: Crypto companies have spent an estimated $245 million on sports sponsorships in 2022, including deals that are falling apart. The category spent more than $200 million in 2021.
- FTX was among the biggest spenders, committing more than $100 million over the last two years, per IEG's Sponsorship Intelligence Database.
- "[Crypto] came out of nowhere and put some numbers on the board that take most brands years to spend," Peter Laatz, IEG's global managing director, tells Axios. "They overpaid for everything."
The latest: A number of big sports tie-ins with FTX have been canceled since the company filed for bankruptcy this month.
- The Miami Heat and Miami-Dade County are seeking a new naming rights partner for FTX Arena. Photos captured workers pulling off the company's logo from the building's facade.
- MLB terminated its sponsorship deal with the company, meaning MLB umpires will no longer sport FTX patches on their uniforms.
- Formula 1 team Mercedes suspended its FTX sponsorship deal shortly after the bankruptcy filing, removing the company's logo from its cars.
Plus: Tom Brady, Steph Curry, Naomi Osaka and Shohei Ohtani are among the athletes named in a class-action lawsuit against FTX brand ambassadors.
The big picture: As FTX has imploded, some of the other major crypto spenders have attempted to assuage nervous customers and business partners.
- Kris Marszalek, CEO of Crypto.com, told customers last week that its balance sheet was "very strong" and that cash withdrawals were working as normal.
- Like FTX, Crypto.com has a naming rights deal with the former Staples Center in Los Angeles, home of the NBA's Lakers and Clippers, the NHL's Kings and WNBA's Sparks. It also just began a major sponsorship with the World Cup.
What's next: Sports teams and leagues are going to be very reluctant to partner with crypto companies.
- "There will be some reckoning around whether or not [they] want to align with these types of brands and how volatile they are. The only league that did that was the NFL. [They] were very conservative from the jump," says IEG's Laatz.