Yahoo Finance Crypto sponsorships boom in NBA, up 6,400% this season: IEG
Crypto brands led the NBA’s latest leg up in sponsorship revenue, according to new data from IEG’s Sponsorship Intelligence Database.
The consulting firm found that cryptocurrency sponsorships increased from $2 million during the 2020-21 season to $130 million this season, marking a 6,400% increase year-over-year. NBA sponsorships as a whole were up 12% during the 2021-22 season, totaling a record $1.64 billion.
“The cryptocurrency category’s sponsorship sending spree is like nothing we have ever seen before, representing 1/3 of all new NBA sponsorship deals,” Peter Laatz, IEG Global Managing Director, stated in a press release.
Five crypto brands — Crypto.com, Webull, Coinbase, FTX, and Socios.com — currently represent 92% of the crypto spending across the league.
Crypto.com signed a six-year jersey patch deal with the Philadelphia 76ers and also had its name plastered on the home of the Lakers, the arena formerly known as the Staples Center. FTX now sponsors the Miami Heat's arena, while Webull occupies space on Brooklyn Nets jerseys.
“We think it's going to take the sports world by storm, much like social media did and the internet before that,” said Philadelphia 76ers exec Chris Heck when the team unveiled its Crypto.com jersey patch in September.
So far, Heck has been proven right by the skyrocketing spending. Across the NBA, the crypto industry moved from 43rd to second overall when it comes to sponsorship spending. Technology led the category, followed by crypto, banks, telecom, and sports apparel, all of which spent more than $100 million.
Teams have leveraged their crypto sponsorships into fan touchpoints as well. The 76ers, for instance, launched NFTs with Crypto.com. And the Warriors released a collection of NFTs with FTX that can be turned into physical goods and generate more value as the team advances throughout the playoffs.
While those NFTs have appreciated in value, many cryptocurrencies themselves haven’t fared as well this year. The asset class's two largest coins by market cap, bitcoin (BTC-USD) and ethereum (ETH-USD), are down roughly 35% and 50% respectively year-to-date.
The exchanges that allow investors to trade those coins — and also sponsor NBA teams — haven’t performed much better as the market approaches bear territory. Coinbase, the largest publicly traded crypto exchange, has lost more than 75% of its value in the last six months. The company recently announced plans to slow hiring after reporting earnings that missed Wall Street estimates.
For now, the cutbacks haven’t reached crypto companies' marketing arms though, and sports leagues are continuing to benefit.
Josh is a producer for Yahoo Finance.
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