FTX Arena, formerly known as the Miami Heat’s stadium, has been renamed Kaseya Center in the latest development of crypto sports sponsorships. The crypto winter in sports sponsorships can be traced back to 2021 when large sponsorships were being approved, such as Crypto.com’s $700 million deal to buy naming rights to the Lakers’ stadium and FTX sponsoring esports organization TSM for $210 million. However, in the second half of 2022, crypto sponsorship spending slumped to $3 million. Conrad Wiacek, head of sports analysis and consulting at GlobalData, isn’t optimistic for the future of crypto dealmaking, saying that he doesn’t expect crypto deals to bounce back anytime soon.
Joe Favorito, a veteran sports media consultant and professor at Columbia University, believes that the path for crypto to get back into sports sponsorships is establishing trust with fans and the leadership of teams alike. He thinks that as federal regulation comes along, there will be an interest in this space because people want to know that it’s safe, secure, and viable. “It has a chance to come back just like there are plenty of dotcoms that came out of that,” Favorito said.
Kaseya Center has had four different names since it opened in 1998, and in fact, a few stadiums have changed names many more times. The once burgeoning tech industry spent a lot of money to get their names on stadiums back in the late 1990s as well, only to go through their own devastating growing pains following the dot-com crash. PSINet and CMGI were both up-and-coming internet companies at that time. As FTX did some 20+ years later, they signed huge naming rights deals, but these companies and many others along with them were swallowed up by the dotcom bubble before they could make good on the promises they made to franchises.
The future of crypto sports sponsorships may depend on trust and regulation. Emerging industries such as crypto throwing gobs of money at sports franchises is nothing new, but it’s essential to establish trust with fans and team leadership. While the market will dictate where crypto sports sponsorships go, it’s a category that will continue to evolve as the marketplace evolves and people understand it a little bit more. The key to the future of crypto sports sponsorships is to establish trust, safety, and viability to move forward.