WEBVTT - Crypto's Betting Big on Sports 0:00:02.640 --> 0:00:05.840 This is Bloomberg Crypto, a daily Bloomberg I Heard podcast, 0:00:06.040 --> 0:00:08.959 and I'm Stacy Marie Ishmael, Managing editor of Crypto for 0:00:09.039 --> 0:00:25.080 Bloomberg News. It's Friday, September two. I'm Anerera, a senior 0:00:25.079 --> 0:00:28.840 crypto editor for Bloomberg News. In today for Stacy Marie Ishmael. 0:00:30.760 --> 0:00:33.080 If you're a fan of the Chelsea football team, then 0:00:33.120 --> 0:00:35.920 you might have already spotted a curious little whale on 0:00:35.960 --> 0:00:41.840 the sleeves of Rahim Sterling and his teammates. This unassuming 0:00:41.880 --> 0:00:45.000 logo is part of a twenty million pounder year deal 0:00:45.240 --> 0:00:48.680 between the football club and the cryptocurrency platform Whale finn 0:00:49.120 --> 0:00:52.320 and it's a big departure from previous sponsor Yundai, whose 0:00:52.360 --> 0:00:56.400 branding marked the official uniform for years. Crypto companies have 0:00:56.480 --> 0:00:59.840 spent more than two billion on sports advertising around the world. 0:01:00.120 --> 0:01:04.039 The n b A Major League Baseball Formula one. Even 0:01:04.080 --> 0:01:07.440 the Drone Racing League has its own crypto sponsor. But 0:01:07.560 --> 0:01:10.600 in a market downturn, how long will these big investments 0:01:10.600 --> 0:01:13.920 in sports sponsorships last? And can they persevere through the 0:01:13.959 --> 0:01:18.399 crypto winter? Today I'm joined by Bloomberg reporter Kimbasin the 0:01:18.440 --> 0:01:21.640 aggression that they're showing to to compete with everyone else. 0:01:21.680 --> 0:01:24.480 They want to be seen on the same level. To 0:01:24.560 --> 0:01:34.240 discuss the return on investment on crypto advertising. Hi Kim, 0:01:34.280 --> 0:01:37.800 thanks for joining us. Hello, So start by giving us 0:01:37.840 --> 0:01:42.360 an overview what's going on with crypto companies in sports. Yeah, 0:01:42.440 --> 0:01:47.080 so crypto companies have committed two point four billion or 0:01:47.120 --> 0:01:50.920 more on sports marketing just over the past eighteen months. 0:01:50.960 --> 0:01:54.920 So that's all kinds of crypto or blockchain related companies 0:01:54.960 --> 0:01:59.840 and all across sports globally. It's been this avalanche of 0:02:00.040 --> 0:02:05.000 bending that's entered all kinds of sports leagues across the world. 0:02:05.120 --> 0:02:08.839 And this is especially interesting for these leagues because it's 0:02:08.919 --> 0:02:12.120 it's additive. This is new money for them. It's all 0:02:12.160 --> 0:02:16.520 additive to their existing sponsorships. So how does crypto compare 0:02:16.600 --> 0:02:23.040 to other sponsorships, other industries at sponsor sports. Yeah, it's 0:02:23.080 --> 0:02:26.480 it's interesting how the how these industries work in sports marketing. 0:02:26.520 --> 0:02:29.800 So it's like they decide to use this as a 0:02:29.880 --> 0:02:32.959 primary path of marketing for them. So take beer for example, 0:02:34.120 --> 0:02:36.480 Let's say a beer sponsors contract ends it can be 0:02:36.560 --> 0:02:39.239 replaced by a new beer sponsor, hopefully at a higher 0:02:39.320 --> 0:02:42.720 rate for the league. That's exclusive. All these crypto deals 0:02:42.720 --> 0:02:46.000 are brand new and they don't bump into anyone else. 0:02:46.480 --> 0:02:48.960 That means they can compete at the same kind of 0:02:48.960 --> 0:02:53.239 title sponsor level as everyone else, so they can be 0:02:53.400 --> 0:02:56.560 comparable like in the NBA, for example, their number two, 0:02:56.639 --> 0:02:59.799 they're only behind the tech companies in the NBA and 0:03:00.000 --> 0:03:03.760 in basketball. And are they competing out among themselves like 0:03:03.800 --> 0:03:07.280 could you have two top crypto sponsors or not? Really 0:03:07.280 --> 0:03:09.880 has that even presented itself yet? Well, there was a 0:03:09.919 --> 0:03:12.919 mad rush at the very beginnings. Eighteen months ago to 0:03:13.080 --> 0:03:17.680 two years we saw the first sponsorships start to trickle in. 0:03:17.720 --> 0:03:21.280 There was like Aston Martin's Formula One team and things 0:03:21.320 --> 0:03:25.200 like that, and tokens for European football teams and and 0:03:25.200 --> 0:03:28.320 and so on. But the big leagues, I'm sure there 0:03:28.320 --> 0:03:31.079 were there were fights over who gets you know, the 0:03:31.560 --> 0:03:35.240 NBA or Major League Baseball and the various biggest teams 0:03:35.280 --> 0:03:38.760 in the world like the Dallas Cowboys in American Football, 0:03:39.200 --> 0:03:43.880 Manchester United and England. These these are coveted properties that 0:03:43.880 --> 0:03:46.240 that the crypto firms want to get involved with. Are 0:03:46.280 --> 0:03:48.960 they more aggressive than other industries? Like what are the 0:03:48.960 --> 0:03:52.680 differences you've seen between crypto and say, like the alcohol 0:03:52.760 --> 0:03:56.080 industry or the tobacco industry, if that's still a sponsorship 0:03:56.280 --> 0:04:00.240 that's considered viable. Yeah, to Tobacco's the tobacco's fun. It's 0:04:00.280 --> 0:04:03.400 it's been a couple of decades since they they played 0:04:03.440 --> 0:04:05.760 sort of this role of benefactor. And that's what Crypto 0:04:05.800 --> 0:04:07.800 is doing right now. If you look back a couple 0:04:07.840 --> 0:04:11.080 of decades in Formula one, for example, tobacco decided this 0:04:11.120 --> 0:04:12.520 is our thing. We're gonna spend a whole bunch of 0:04:12.520 --> 0:04:15.160 money on this, and you saw the cars and race 0:04:15.200 --> 0:04:19.000 tracks just full of of this tobacco branding. Now Crypto 0:04:19.040 --> 0:04:21.320 has decided to this is what we're gonna do. This 0:04:21.360 --> 0:04:24.160 is the way we're gonna acquire new users. So we're 0:04:24.160 --> 0:04:26.520 gonna just cover stuff in this and in F one 0:04:26.680 --> 0:04:30.600 in particular, like crypto dot com has its own sponsored race, 0:04:30.800 --> 0:04:33.880 the one in Miami. The aggression that they're showing to 0:04:33.880 --> 0:04:36.239 to compete with everyone else. They want to be seen 0:04:36.560 --> 0:04:40.840 on the same level as those other industries, and this 0:04:40.839 --> 0:04:43.400 is how they're gonna do it. And and they're quite new, 0:04:43.480 --> 0:04:46.159 right compared to the others, totally brand new, just out 0:04:46.200 --> 0:04:49.640 of out of virtually nowhere. Two point four billion has 0:04:49.720 --> 0:04:53.400 just arrived or leagues, athletes, teams, and so on. So 0:04:53.520 --> 0:04:59.960 has any sport been more receptive than others? You think, yes, absolutely. 0:05:00.240 --> 0:05:04.320 I think most have become okay with this new industry 0:05:04.480 --> 0:05:08.880 swooping in. But the last biggest holdout is the National 0:05:08.880 --> 0:05:12.080 Football League, the biggest sport in the US, and it's 0:05:12.080 --> 0:05:17.040 an enormous prize because they're normally very slow in allowing 0:05:17.320 --> 0:05:21.559 these new industries. In the prior ones that they've only 0:05:21.640 --> 0:05:27.080 recently allowed to advertise and sponsor NFL things is the 0:05:27.160 --> 0:05:31.160 sports gambling industry and liquor. They did not allow spirits 0:05:31.160 --> 0:05:34.839 advertising until just a few years ago, so they're generally 0:05:34.880 --> 0:05:38.120 reticent for new things, but slowly they've been opening up. 0:05:38.160 --> 0:05:41.840 So now restrictions are loosening on what teams are and 0:05:41.880 --> 0:05:45.240 aren't allowed to do with crypto sponsorships, and we're seeing 0:05:45.400 --> 0:05:49.040 a few deals trickling. So at the same time, we've 0:05:49.080 --> 0:05:52.640 seen NFL players getting involved right getting sponsorships. We saw 0:05:52.680 --> 0:05:56.839 Tom Brady, Aaron Rodgers, So what's the difference there. We 0:05:57.279 --> 0:06:00.400 just reported that Dak Prescott, he's the court back for 0:06:00.440 --> 0:06:04.560 the Dallas Cowboys, he signed a multiyear endorsement deal with 0:06:05.000 --> 0:06:09.360 Blockchain dot Com. Now they already have a sponsor relationship 0:06:09.560 --> 0:06:12.560 with the with the Cowboys, it's the first of its kind. 0:06:12.640 --> 0:06:15.320 But most of the NFL teams and the league itself 0:06:15.440 --> 0:06:19.480 that's all still wide open. That means there there's a 0:06:19.520 --> 0:06:21.760 lot to pick from as as the rules loosen up. 0:06:21.880 --> 0:06:24.800 So some listeners might remember seeing crypto ads during the 0:06:24.839 --> 0:06:28.200 Super Bowl. So has it paid off? Because those are 0:06:28.200 --> 0:06:30.559 pretty expensive. Is there a sense of whether it's worth 0:06:30.600 --> 0:06:33.640 spending all this money? It just depends on your definition 0:06:33.680 --> 0:06:37.000 of worth it, right because it feels like it feels 0:06:37.000 --> 0:06:40.120 like they're using any means necessary that the way we 0:06:40.440 --> 0:06:43.200 get more users than everyone else is to spend all 0:06:43.240 --> 0:06:47.120 this money on marketing, and and because it's such a 0:06:47.160 --> 0:06:51.479 competitive environment right now in user acquisition, this is what 0:06:51.600 --> 0:06:54.799 it's going to take. And if ft X and Crypto 0:06:54.839 --> 0:06:57.360 dot Com as two of the and coin base as 0:06:57.520 --> 0:07:01.480 three of the larger spenders UH in this space, look 0:07:01.520 --> 0:07:03.720 at it like this is if they're doing it, then 0:07:03.760 --> 0:07:05.440 we probably have to do it to That kind of 0:07:05.480 --> 0:07:09.080 marketing spend is something they could afford, at least until recently. 0:07:13.280 --> 0:07:15.720 So the Staples Center, which is where the Lakers and 0:07:15.760 --> 0:07:18.680 the Clippers play was renamed the Crypto dot Com Arena. 0:07:18.840 --> 0:07:20.520 Is it too soon to say whether we'll get the 0:07:20.520 --> 0:07:23.080 same in the in a big NFL stadium. Crypto dot 0:07:23.160 --> 0:07:25.960 Com is the title sponsor for a ton of stuff 0:07:26.080 --> 0:07:29.000 right now. So they have the the UFC Formula one. 0:07:29.040 --> 0:07:31.920 It's about to be a big sponsor at the World 0:07:32.000 --> 0:07:35.280 Cup in Doha this fall. But the one that really 0:07:35.280 --> 0:07:38.320 caught the attention of the the American public in particular 0:07:38.720 --> 0:07:42.360 was the deal to rename the Staples Center where the 0:07:42.840 --> 0:07:46.720 l A, Lakers and Clippers play. And that's a seven 0:07:46.880 --> 0:07:51.200 hundred million dollar deal over twenty years. And that arena 0:07:51.320 --> 0:07:53.760 had so much history in it over the past couple 0:07:53.760 --> 0:07:57.880 of decades with Kobe and Shack and and all the championships, 0:08:02.560 --> 0:08:05.560 culturally iconic things happened there. When people heard of what 0:08:05.760 --> 0:08:07.560 was it going to be called the Staples Center anymore, 0:08:08.120 --> 0:08:12.040 they've freaked out that. The fans, the players made comments 0:08:12.080 --> 0:08:15.480 about it, the coaches. It's a big change. And I 0:08:15.520 --> 0:08:19.040 don't know we're gonna inevitably there. There's probably gonna be 0:08:19.120 --> 0:08:21.560 some other some other stadiums that go this round. There's 0:08:21.560 --> 0:08:24.520 so many banks that are title sponsors of of stadiums 0:08:24.800 --> 0:08:29.320 so you know it seems inevitable. Up next, more with 0:08:29.360 --> 0:08:33.000 Bloomberg reporter kimbas Seen on how crypto sponsorships have been 0:08:33.000 --> 0:08:35.920 met with both open arms and hesitation in a tale 0:08:35.920 --> 0:08:50.000 of two footballs, So let's move to soccer, and I 0:08:50.040 --> 0:08:53.319 will only say soccer these two times before anybody on 0:08:53.360 --> 0:08:56.120 the other side of the original cringe. But so we've 0:08:56.120 --> 0:09:00.079 seen sort of a big spending from crypto there to 0:09:00.480 --> 0:09:04.319 why is that You're seeing some spending there even now, 0:09:04.559 --> 0:09:07.720 even in the last couple of months after after the crash, 0:09:07.840 --> 0:09:10.880 Like there are new deals worth millions with English Premier 0:09:10.960 --> 0:09:15.920 League teams Everton Manchester City signed of extended one of 0:09:15.920 --> 0:09:19.960 its one of its deals to it's like practice squad uniforms, 0:09:19.960 --> 0:09:21.959 so everything is just getting blanket and a lot of 0:09:22.040 --> 0:09:25.680 the teams also have tokens. Now it has definitely slowed down, 0:09:26.000 --> 0:09:29.440 but it doesn't appear to be stopping. So some companies 0:09:29.640 --> 0:09:33.679 have opted to sponsor football players directly, right, Like Cristiano 0:09:33.760 --> 0:09:36.760 Ronaldo has a sponsorship with finance, Why would they go 0:09:36.840 --> 0:09:40.040 down that route? And like how does that potentially clash 0:09:40.120 --> 0:09:43.360 with the club sponsorship? Right? Like could that instance ever 0:09:43.440 --> 0:09:47.280 arise where you're like have to competitors sponsoring the superstar 0:09:47.640 --> 0:09:52.920 players are you know, brands and businesses in their own right. 0:09:53.280 --> 0:09:57.440 On the platform's side, you want to have not just 0:09:57.520 --> 0:10:00.440 like a pitch person, but someone who can who can 0:10:00.480 --> 0:10:03.840 really carry your whole brand forward. And if you're working 0:10:03.920 --> 0:10:08.800 with someone the magnitude of Christiano Ronaldo or Tom Brady 0:10:08.800 --> 0:10:10.760 in the US, and then you're hoping that that will 0:10:10.880 --> 0:10:14.160 push you along. In terms of whether they bump up 0:10:14.160 --> 0:10:16.880 against each other, I haven't seen it yet, so I'm 0:10:16.920 --> 0:10:20.080 not I'm not quite sure. A lot of times we're 0:10:20.120 --> 0:10:23.080 saying the word crypto in a very broad sense in 0:10:23.160 --> 0:10:25.320 that you know the platforms and then like the the 0:10:25.440 --> 0:10:28.200 n f T services and and so on, they're not 0:10:28.400 --> 0:10:31.959 directly competing with each other a lot, and these exclusivity 0:10:31.960 --> 0:10:35.240 agreements may allow them to coexist. But since its alve 0:10:35.400 --> 0:10:38.120 so totally brand new, I guess we'll just have to see. 0:10:38.760 --> 0:10:40.920 You know, prices have been crashing. You were alluding to 0:10:40.960 --> 0:10:44.360 this before. My first question around this is, do you 0:10:44.400 --> 0:10:47.000 know athletes still want to be associated with it? Is 0:10:47.040 --> 0:10:50.839 the appeal of big cash persuasive enough? Like, has there 0:10:50.880 --> 0:10:55.120 been any change of minds recently or not? Really? If 0:10:55.120 --> 0:10:57.400 there's money in it for them, They're they're going to 0:10:57.520 --> 0:11:01.000 be attracted to it. So as long as there's something 0:11:01.040 --> 0:11:04.400 interesting to endorse, like we're gonna keep and they have 0:11:04.440 --> 0:11:06.760 the money to spend and they are willing to to 0:11:06.800 --> 0:11:09.319 spend those marketing dollars on sports, then we're going to 0:11:09.440 --> 0:11:13.160 keep seeing these deals. I think what we saw over 0:11:13.200 --> 0:11:17.920 the past month is TV spend on crypto sports ads 0:11:17.960 --> 0:11:22.560 just totally dip super far almost aid nothing. And you 0:11:22.679 --> 0:11:25.600 had ads with Tom Brady for fd X, she had 0:11:25.640 --> 0:11:29.800 ads with Matt Damon for Crypto dot Com. All just 0:11:29.920 --> 0:11:32.280 get taken off the air at least for now, but 0:11:32.679 --> 0:11:34.880 Dak Prescott's about to be out of the air for blockchain, 0:11:35.120 --> 0:11:38.400 so we'll see it's going to keep coming. And what 0:11:38.480 --> 0:11:41.080 about these deals with with companies right, like do you 0:11:41.120 --> 0:11:44.440 have any sense of whether they paid for them already? Like, 0:11:44.520 --> 0:11:46.680 are there any risks that someone might not be able 0:11:46.720 --> 0:11:49.000 to pay up? We saw I think in Italy there 0:11:49.120 --> 0:11:51.040 was you know, a rumor. I don't know if it's 0:11:51.040 --> 0:11:53.720 an actual story yet, but I think there was issues 0:11:53.760 --> 0:11:56.480 with one club and in the UK as well, where 0:11:56.520 --> 0:11:58.839 one of their sponsors wasn't able to pay, Like will 0:11:58.920 --> 0:12:00.880 we see more of that. A lot of these are 0:12:01.000 --> 0:12:03.800 very long term deals. So you know the Staples Center 0:12:04.000 --> 0:12:07.079 crypto dot com Arino one is twenty years for example. 0:12:07.160 --> 0:12:11.880 Some of them are two five. So these are annual 0:12:12.559 --> 0:12:15.160 payments that are locked in for so long so if 0:12:15.240 --> 0:12:18.200 anything happens. But but that's uh, the same with with 0:12:18.440 --> 0:12:22.079 all sponsors that they signed up for for one year 0:12:22.160 --> 0:12:24.880 or several years and it becomes an annual payment. But 0:12:24.920 --> 0:12:28.120 in this case, we have seen a couple things go under. 0:12:28.320 --> 0:12:30.560 I believe the the n of us L, that's the 0:12:30.679 --> 0:12:34.240 National Women's Soccer League in the US, one of its 0:12:34.280 --> 0:12:38.320 sponsors went under, and they were supposed to have Voyager 0:12:38.360 --> 0:12:40.400 went under. Yeah, yeah, and they were supposed to have 0:12:40.440 --> 0:12:43.760 payments out to the players that they warned may or 0:12:43.800 --> 0:12:47.160 may not still go through. And obviously long term, I 0:12:47.200 --> 0:12:51.800 don't think that that relationship is going to continue. All right, 0:12:52.280 --> 0:12:55.840 Thank you so much for joining us. Kim, of course, 0:12:55.880 --> 0:12:58.480 thank you so much for having me. You can find 0:12:58.520 --> 0:13:01.520 more of Kim's reporting on the Berg terminal, on Bloomberg 0:13:01.600 --> 0:13:05.520 dot com and on Twitter. Kim is at at k 0:13:05.800 --> 0:13:09.760 I M b h A s I N. I'm an 0:13:09.880 --> 0:13:13.800 erea Bloomberg crypto Senior editor in Today for Stacy Mary 0:13:13.880 --> 0:13:24.400 Ishmael on the next episode of Bloomberg Crypto. By some estimates, 0:13:24.480 --> 0:13:27.880 crypto hacks two have cost the industry close to two 0:13:28.320 --> 0:13:32.520 billion dollars. That's billion with a B. What could a 0:13:32.520 --> 0:13:35.800 hack resistant crypto industry look like? And what's taking so long? 0:13:38.600 --> 0:13:41.720 This is Bloomberg Crypto, a daily podcast from Bloomberg and 0:13:41.800 --> 0:13:44.760 I Heart Radio. For more shows from I Heart Radio, 0:13:44.960 --> 0:13:48.080 visit the I Heart Radio app, Apple Podcasts, or wherever 0:13:48.160 --> 0:13:51.679 you get your podcast. Send us your comments, questions or 0:13:51.679 --> 0:13:54.760 suggestions for the show to Crypto at Bloomberg dot net 0:13:55.280 --> 0:13:59.719 or find us on Twitter. We're at Crypto. The supervising 0:13:59.720 --> 0:14:03.120 Pretty Stir of Bloomberg Crypto is Vicky Verglina. Our senior 0:14:03.160 --> 0:14:07.960 producer is Janet Babin. Our producer is Mohammed Faruk. Associate 0:14:08.000 --> 0:14:11.880 producer is Moses on Them. Associate producer is Thai Bubba 0:14:12.559 --> 0:14:16.400 Desta wonder At is our engineer. Original music by Leo Sidrin. 0:14:17.640 --> 0:14:20.040 I'm Stacy Marie Ishmael. Have a great weekend.