A Guide For Sports Organisations To Partnering With A Cryptocurrency Provider
One of the most noticeable trends in the sporting world since the emergence of COVID is the increased prominence of cryptocurrency brands in the world of sports sponsorship. According to Nielsen’s Global Interactive Marketing Report, investment by blockchain and cryptocurrency companies in sports sponsorship is estimated to reach US$5 billion by 2026. In the same report, Nielsen estimate that investment by cryptocurrency and blockchain brands in sport sponsorship will increase by 778% when compared to the levels of investment in 2021; for context, investment in sport sponsorship by automotive brands is projected to rise by 5% from 2021 to 2026.
In February of this year, Manchester United agreed a multi-year deal with Tezos for sponsorship of the training kit of its men’s and women’s teams. Manchester United’s announcement of the deal mentions the introduction of “fans to Web3 technology through the Tezos blockchain” and “several new fan experiences built on the Tezos blockchain”. Only a few weeks later, Manchester City announced that OKX, a global cryptocurrency exchange, is to become the club’s “Official Cryptocurrency Exchange Partner”. It is now being reported that Liverpool are exploring the possibility of a front-of-shirt sponsorship deal with a cryptocurrency exchange from the 2023/24 season onwards.
This trend in sponsorship investment isn’t just restricted to football. As of Christmas Day 2021, Staples Center, the home of the NBA’s Los Angeles Lakers, was renamed the Crypto.com Arena. This adds to Crypto.com’s already impressive suite of sports sponsorships: a multi-year fight apparel deal with the UFC, an agreement to be a “Global Partner” of Formula 1 and the “Official Cryptocurrency Platform Partner” of Paris Saint-Germain.
The sums involved in the majority of these cryptocurrency sponsorships are significant and rightsholders across the sporting world are understandably taking note – however, given the nature of these deals, it is important for both the rightsholder and the sponsor to ensure they are minimising the risks involved from a legal, regulatory and compliance perspective.
This article examines the steps that sports organisations should take when considering such a partnership, including:
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Josh is a commercial and regulatory lawyer in Wiggin’s Digital Entertainment team based in London. He is experienced in advising clients across the production and distribution chain in the sports, esports, advertising and games sectors on a range of commercial and regulatory matters including the acquisition, licensing and distribution of content via various digital platforms as well as sponsorship arrangements and data rights issues.
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