• How Crypto is Being Accepted in the Sports World

  • Sports and cryptocurrency may appear to be unrelated realms at first glance, but closer examination reveals that they have a lot to offer one another.

    Sponsorships Provide Crypto Exposure

    Bitpay, a Bitcoin payment service, partnered with ESPN in 2014 to sponsor the St. Petersburg Bowl, a collegiate football game. Even though it was a tiny agreement, it was noteworthy because it was the first large crypto sports deal. The New York Giants, in partnership with Grayscale Investments, became the league’s first team to have a crypto sponsorship this year.

    While football kicked off the trend of crypto sponsorships in 2021, it’s difficult to find a sports league that doesn’t have some sort of cryptocurrency tie-in. StormX, a cryptocurrency payback program, recently announced a collaboration with NBA team Portland Trail Blazers. The Miami HEAT secured an exclusive naming rights arrangement with cryptocurrency exchange FTX earlier this year, branding their home stadium the “FTX Arena.” The $135 million contracts lasted for 19 years. Following that, on June 23, FTX signed the largest sports sponsorship in crypto history, a five-year deal with Major League Baseball.

    Those involved in sponsorship negotiations believe that selling crypto services to sports enthusiasts has a lot of promise. MLB Chief Revenue Officer Noah Garden had this to say about the FTX deal:

    “Our fans have been early adopters when it comes to incorporating new technologies into our game.”

    The majority of sports sponsorships have come from bitcoin exchanges and payment companies, demonstrating a strong link between sports enthusiasts and cryptocurrency adoption. MLB franchise Oakland A’s offered a full season suite for one Bitcoin earlier this year, and other sports teams are starting to allow cryptocurrency ticket purchases.

    Crypto sponsorships could also provide a much-needed opportunity for sports organizations to attract younger followers. The average MLB fan is now 57 years old, according to a 2017 report by the Sports Business Journal.

    The Ascension of NFTs In sports, blockchain technology is enhancing the value of collectible NFTs for sports lovers.

    Non-fungible tokens (NFTs) are a sort of asset that enables artists to tokenize digital art, collectibles, and any other type of value on the Internet. NFTs have improved collectibles by allowing for proven ownership and scarcity thanks to the blockchain technology that underpins them.

    Because of its involvement in the digital collectible card platform NBA Top Shot, the NBA has been one of the most successful organizations to use NFTs. The game, which is based on the FLOW blockchain, allows users to purchase, sell, and trade NBA “moments” while keeping them in digital wallets on the blockchain.

    The platform has had a fantastic year in 2021, with over one million users as of May. Top Shot is also fetching large money on the secondary market, with a rare LeBron James moment selling for $387,600 in April.

    Soccer is also benefiting from the NFT boom in Europe. Sorare, a fantasy soccer game, has landed licensing deals with numerous prominent European teams, including Real Madrid and AC Milan. Players take on the role of managers in the game, constructing teams of soccer player NFTs on the Ethereum blockchain. Teams are then graded based on their players’ performance on a real-world soccer field, similar to traditional fantasy soccer.

    NFTs on Sorare are also fetching exorbitant prices, though not quite as much as NBA Top Shots. A one-of-a-kind Cristiano Ronaldo NFT was sold for $290,000 in March.

    NFTs are used in a variety of ways by sporting organizations, including digital collectibles. The NBA franchise Dallas Mavericks’ owner, Mark Cuban, intends to convert game tickets into NFTs. In a March interview with the Delphi Podcast, Cuban stated:

    “We want to be able to discover ways to ensure that not only can our customers, our fans, buy and resell tickets but that we also profit from them.”

    Cuban expects that by employing NFTs, the Mavericks will be able to accommodate fans who wish to sell high-demand games from their season tickets while also profiting from the sale.

    Participation of Fans in Sports Teams

    In some circumstances, sports teams are adopting blockchain technology.

    The exchange for tokenized sports Chiliz allows sports teams to issue fan tokens, which fans can use to buy a piece of their favorite teams on Socios.com. Owners of fan tokens have the opportunity to vote on important club decisions as well as get VIP benefits, promotions, and other unique experiences. In 2019, Juventus FC became the first team to create a fan token on the Chiliz platform. Since then, other soccer and esports teams, including UEFA Cup winners FC Barcelona and Paris Saint-Germain FC, have undertaken Fan Token Offerings.

    By 2027, the worldwide sports sponsorship business is anticipated to be worth almost $90 billion. This sum could skyrocket in the future years as the sports sector adopts cryptocurrencies and blockchain technologies.

    What's your reaction?