Does football no longer trust the cryptocurrency?

In the last few weeks, Inter and Roma have both removed the DigitalBits sponsor from their jerseys after the cryptocurrency company skipped all payments in 2022/23. Recently, Binance, the company that sponsors Lazio also blocked bitcoin withdrawals twice in 48 hours causing losses to investors. The cryptocurrency world has invested heavily in sports in the past three years, exploiting the need for clubs to find new forms of income, especially after the pandemic crisis, and the betting sponsor ban in Spain and Italy.

From football, basketball to motosport and eSports, companies such as Crypto.com, Webull, CoinBase, FTX or Socios have put their logos on plenty of jerseys, arenas and cars, but the recession of the last period and the bankruptcy of big companies such as FTX has led clubs and leagues to reevaluate sponsorship of crypto companies, which are considered increasingly less solid and economically safe. Compared to the enthusiasm of just two years ago, we now seem to be going through a "crypto winter" that could change the sponsorship landscape in the sports world. 

In November 2022, cryptocurrency trading company FTX announced its bankruptcy, a few months after entering the world of sports with major sponsorships such as those in the NBA (Golden State Warriors and Washington Wizards among others) and putting its own logo on the Mercedes cars of Lewis Hamilton and George Russell. FTX had also acquired in 2021 and for 19 years the naming rights to what is now the Kaseya Center in Miami, arena of the Heat.

The failure of FTX and the system as a whole created a collapse in sponsorships and the rethinking by many clubs of the effectiveness of that business model. The collapse in prices has weakened appetite on the part of clubs, as well as trust. The link between clubs and crypto seems to have been born almost hastily, at a time when the economic crisis resulting from the pandemic had challenged traditional marketing models. It is likely that sports clubs are now experiencing and noticing the volatility of cryptocurrencies and, in order not to resort to reputational damage as well, are starting to discontinue partnerships earlier than expected, as in the case of Atletico Madrid, which meanwhile has not put the new WhaleFin sponsored Away jersey on sale on its online store.

Thus, cryptocurrency companies are losing sponsorship deals as a consequence of the falling price of tokens. All confidence in the industry is suffering as a result; for their part, many clubs that have chosen to launch their own cryptocurrency seem to have approached this world almost superficially, trivializing investments and in part taking advantage of the inexperience or credulity of fans.

Among the leagues, it is no coincidence that the Premier League, the richest of the five European majors, has been involved in many sponsorships with cryptocurrency companies in recent years. Many clubs have launched tokens that have been losing value since as early as last year, as also revealed by a report by The Athletic. There have also been extremely curious cases, such as Watford's sleeve sponsor, the meme coin Dogecoin, or Manchester United's training sponsor, the open-source blockchain Tezos. But there have also been numerous challenges from fans who see cryptos and tokens as a parasitic model towards clubs that can cause financial damage due to its extremely volatile valuation, as we have seen in Serie A in recent days.

It is likely that sports clubs will not choose to abandon partnerships with trading companies; rather, it is possible that the focus of the partnerships will not be as economic main sponsors but that the ability of the blockchain to create communities with ease will be exploited. Indeed, football in the third millennium cannot do without the fans around the world who can be engaged through digital initiatives, and unfortunately, neither can it do without the sponsors who promise much and deliver little.