The year 2021 saw a large number of crypto companies investing billions of dollars in sports sponsorships, but this year’s downturn has caused the financial inflow to dry up, reported NY post.
Following the crash, FTX along with other crypto companies have decided to quit sports deals in order to handle the crash.
Companies that splurged excessively on sports deals last year are now aiming to cut costs as a so-called “crypto winter” takes hold and businesses look to trim costs.
The cryptocurrency firm FTX, which paid $135 million to rename the Miami Heat’s home in March 2021, withdrew from a jersey patch deal to the MLB’s Los Angeles Angels in recent times as the crypto market crashed, sources familiar with the matter said.
The Washington Wizards of the NBA and a cryptocurrency startup had a separate patch arrangement that just fell through, according to sources.
Both offers were scrapped as the market fell apart, according to the sources. Crypto firms, legislators, and regulators who supervise the space’s games have all seen the Washington Wizards patch.
Requests for comment from FTX and the Washington Wizards were not returned.
After the spending fall, prominent crypto exchanges have piled on sponsorship deals in 2021 to entice sports fans, many of whom have a lot of money and a tight job market, thanks to general government support.
Binance also said no to superbowl ads according to a tweet by its CEO CZ.
FTX paid an undisclosed amount to become the MLB’s “official crypto exchange,” spent $ 20 million on an October ad campaign starring Tampa Bay Buccaneers quarterback Tom Brady and his supermodel wife Gisele Bündchen.
FTX paid reportedly $ 6.5 million to Larry David, among many other sponsorships, for a Super Bowl commercial featuring.
While FTX has not made any recent layoffs, the company’s founder, Sam Bankman-Fried, appears to have depicted his current net worth as having plunged by billions.
Apart from FTX, other firms like Coinbase and Crypto.com have taken similar steps too. Crypto giants are taking some serious steps after the market crashed. Recently, Coinbase CEO decided to lay off 18% employees fearing a crypto winter.
