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Crypto companies spend upwards of $2.4 billion on sports marketing

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Yahoo Finance's Josh Schafer breaks down a new report that found crypto companies have spent billions of dollars towards sports marketing.

Video transcript

[MUSIC PLAYING]

SEANA SMITH: Crypto sports sponsorships making headlines amid the down year for the industry. Bloomberg out with a report saying that cryptocurrency companies are committing more than $2.4 billion to sports marketing in the past 18 months. Our sports reporter Josh Schafer is here to discuss. And Josh, I guess, first off, when you take that $2.4 billion, it sounds like a lot, but how does that compare to the more traditional advertisers in this space, namely some of those automakers and the beer brands?

JOSH SCHAFER: Right, yeah. So when you really break this down, $2.4 billion is obviously a lot, but we knew about some of that money, too, right, when you see that big Crypto.com deal, those big deals we've known about. So really, the cryptocurrency companies, if you take a league like the NBA, they finished second in the NBA in sponsorships, but they were behind technology, which is, obviously, a traditional partner there.

And we can pull up a board that we have here of the top NBA sponsor spenders. You see those names. Those are traditional companies, right? Pepsi, Coca-Cola, Anheuser-Busch, Nike, Microsoft. Another thing that all of those companies have that crypto's never really going to be able to cross over into, Pepsi is a sponsor because of Gatorade, right? And they're sitting there on the water bottle. Nike is a sponsor because of the jerseys. Microsoft's a sponsor because of the tablets.

Cryptocurrency can't pierce that market, so those companies are spending more than $50 million per season on those kinds of sponsorships. Crypto is really just in that naming rights deal right now and a little bit of jerseys. But they don't really have an actual use case when it comes to the sports, Dave.

DAVE BRIGGS: But we've learned there is a cost to that, and I don't mean in terms of the actual money, but what can happen when these things go south, i.e. Voyager. And you look at the National Women's Soccer League, and these can really turn bad.

JOSH SCHAFER: Absolutely, yeah. So the National Women's Soccer League probably isn't going to get a lot of the money from Voyager Digital that they were owed, that the players were owed. But the other cryptocurrency companies seem to still be active in the space. From my understanding, FTX and Crypto.com both have expressed continued interest in pursuing sports deals. So I think we're going to continue to see this number grow, guys, this 2.4 billion.

But what I've been told by advertising experts is, it's not going to grow at the same rate anymore. We've kind of seen that market top. These companies spent a lot of money. And now you have top dogs like FTX and Crypto.com that are going to kind of fight against each other. And some of those smaller names like a Voyager probably won't be around.

DAVE BRIGGS: Is there a league that it's most concentrated in? Is there a sport that they prefer the most?

JOSH SCHAFER: To my understanding, no. I think you're going to see a lot in the NFL this year, though, because they couldn't go in the NFL last year, right? So that's where you're going to notice it the most.

DAVE BRIGGS: There you go.

SEANA SMITH: Well, yeah, and also-- yeah.

JOSH SCHAFER: Last year, teams couldn't do NFL.

SEANA SMITH: And more and more pro athletes are getting on board, too, right, with their own NFTs, with their own--

JOSH SCHAFER: Exactly.

SEANA SMITH: --initiatives in the space. So certainly growing in popularity. All right, Josh, thank you.

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