Speaker 1: This is Bloomberg Crypto, a daily Bloomberg I Heard podcast,
Speaker 1: and I'm Stacy Marie Ishmael, Managing editor of Crypto for
Speaker 1: Bloomberg News. It's Friday, September two. I'm Anerera, a senior
Speaker 1: crypto editor for Bloomberg News. In today for Stacy Marie Ishmael.
Speaker 1: If you're a fan of the Chelsea football team, then
Speaker 1: you might have already spotted a curious little whale on
Speaker 1: the sleeves of Rahim Sterling and his teammates. This unassuming
Speaker 1: logo is part of a twenty million pounder year deal
Speaker 1: between the football club and the cryptocurrency platform Whale finn
Speaker 1: and it's a big departure from previous sponsor Yundai, whose
Speaker 1: branding marked the official uniform for years. Crypto companies have
Speaker 1: spent more than two billion on sports advertising around the world.
Speaker 1: The n b A Major League Baseball Formula one. Even
Speaker 1: the Drone Racing League has its own crypto sponsor. But
Speaker 1: in a market downturn, how long will these big investments
Speaker 1: in sports sponsorships last? And can they persevere through the
Speaker 1: crypto winter? Today I'm joined by Bloomberg reporter Kimbasin the
Speaker 1: aggression that they're showing to to compete with everyone else.
Speaker 1: They want to be seen on the same level. To
Speaker 1: discuss the return on investment on crypto advertising. Hi Kim,
Speaker 1: thanks for joining us. Hello, So start by giving us
Speaker 1: an overview what's going on with crypto companies in sports. Yeah,
Speaker 1: so crypto companies have committed two point four billion or
Speaker 1: more on sports marketing just over the past eighteen months.
Speaker 1: So that's all kinds of crypto or blockchain related companies
Speaker 1: and all across sports globally. It's been this avalanche of
Speaker 1: bending that's entered all kinds of sports leagues across the world.
Speaker 1: And this is especially interesting for these leagues because it's
Speaker 1: it's additive. This is new money for them. It's all
Speaker 1: additive to their existing sponsorships. So how does crypto compare
Speaker 1: to other sponsorships, other industries at sponsor sports. Yeah, it's
Speaker 1: it's interesting how the how these industries work in sports marketing.
Speaker 1: So it's like they decide to use this as a
Speaker 1: primary path of marketing for them. So take beer for example,
Speaker 1: Let's say a beer sponsors contract ends it can be
Speaker 1: replaced by a new beer sponsor, hopefully at a higher
Speaker 1: rate for the league. That's exclusive. All these crypto deals
Speaker 1: are brand new and they don't bump into anyone else.
Speaker 1: That means they can compete at the same kind of
Speaker 1: title sponsor level as everyone else, so they can be
Speaker 1: comparable like in the NBA, for example, their number two,
Speaker 1: they're only behind the tech companies in the NBA and
Speaker 1: in basketball. And are they competing out among themselves like
Speaker 1: could you have two top crypto sponsors or not? Really
Speaker 1: has that even presented itself yet? Well, there was a
Speaker 1: mad rush at the very beginnings. Eighteen months ago to
Speaker 1: two years we saw the first sponsorships start to trickle in.
Speaker 1: There was like Aston Martin's Formula One team and things
Speaker 1: like that, and tokens for European football teams and and
Speaker 1: and so on. But the big leagues, I'm sure there
Speaker 1: were there were fights over who gets you know, the
Speaker 1: NBA or Major League Baseball and the various biggest teams
Speaker 1: in the world like the Dallas Cowboys in American Football,
Speaker 1: Manchester United and England. These these are coveted properties that
Speaker 1: that the crypto firms want to get involved with. Are
Speaker 1: they more aggressive than other industries? Like what are the
Speaker 1: differences you've seen between crypto and say, like the alcohol
Speaker 1: industry or the tobacco industry, if that's still a sponsorship
Speaker 1: that's considered viable. Yeah, to Tobacco's the tobacco's fun. It's
Speaker 1: it's been a couple of decades since they they played
Speaker 1: sort of this role of benefactor. And that's what Crypto
Speaker 1: is doing right now. If you look back a couple
Speaker 1: of decades in Formula one, for example, tobacco decided this
Speaker 1: is our thing. We're gonna spend a whole bunch of
Speaker 1: money on this, and you saw the cars and race
Speaker 1: tracks just full of of this tobacco branding. Now Crypto
Speaker 1: has decided to this is what we're gonna do. This
Speaker 1: is the way we're gonna acquire new users. So we're
Speaker 1: gonna just cover stuff in this and in F one
Speaker 1: in particular, like crypto dot com has its own sponsored race,
Speaker 1: the one in Miami. The aggression that they're showing to
Speaker 1: to compete with everyone else. They want to be seen
Speaker 1: on the same level as those other industries, and this
Speaker 1: is how they're gonna do it. And and they're quite new,
Speaker 1: right compared to the others, totally brand new, just out
Speaker 1: of out of virtually nowhere. Two point four billion has
Speaker 1: just arrived or leagues, athletes, teams, and so on. So
Speaker 1: has any sport been more receptive than others? You think, yes, absolutely.
Speaker 1: I think most have become okay with this new industry
Speaker 1: swooping in. But the last biggest holdout is the National
Speaker 1: Football League, the biggest sport in the US, and it's
Speaker 1: an enormous prize because they're normally very slow in allowing
Speaker 1: these new industries. In the prior ones that they've only
Speaker 1: recently allowed to advertise and sponsor NFL things is the
Speaker 1: sports gambling industry and liquor. They did not allow spirits
Speaker 1: advertising until just a few years ago, so they're generally
Speaker 1: reticent for new things, but slowly they've been opening up.
Speaker 1: So now restrictions are loosening on what teams are and
Speaker 1: aren't allowed to do with crypto sponsorships, and we're seeing
Speaker 1: a few deals trickling. So at the same time, we've
Speaker 1: seen NFL players getting involved right getting sponsorships. We saw
Speaker 1: Tom Brady, Aaron Rodgers, So what's the difference there. We
Speaker 1: just reported that Dak Prescott, he's the court back for
Speaker 1: the Dallas Cowboys, he signed a multiyear endorsement deal with
Speaker 1: Blockchain dot Com. Now they already have a sponsor relationship
Speaker 1: with the with the Cowboys, it's the first of its kind.
Speaker 1: But most of the NFL teams and the league itself
Speaker 1: that's all still wide open. That means there there's a
Speaker 1: lot to pick from as as the rules loosen up.
Speaker 1: So some listeners might remember seeing crypto ads during the
Speaker 1: Super Bowl. So has it paid off? Because those are
Speaker 1: pretty expensive. Is there a sense of whether it's worth
Speaker 1: spending all this money? It just depends on your definition
Speaker 1: of worth it, right because it feels like it feels
Speaker 1: like they're using any means necessary that the way we
Speaker 1: get more users than everyone else is to spend all
Speaker 1: this money on marketing, and and because it's such a
Speaker 1: competitive environment right now in user acquisition, this is what
Speaker 1: it's going to take. And if ft X and Crypto
Speaker 1: dot Com as two of the and coin base as
Speaker 1: three of the larger spenders UH in this space, look
Speaker 1: at it like this is if they're doing it, then
Speaker 1: we probably have to do it to That kind of
Speaker 1: marketing spend is something they could afford, at least until recently.
Speaker 1: So the Staples Center, which is where the Lakers and
Speaker 1: the Clippers play was renamed the Crypto dot Com Arena.
Speaker 1: Is it too soon to say whether we'll get the
Speaker 1: same in the in a big NFL stadium. Crypto dot
Speaker 1: Com is the title sponsor for a ton of stuff
Speaker 1: right now. So they have the the UFC Formula one.
Speaker 1: It's about to be a big sponsor at the World
Speaker 1: Cup in Doha this fall. But the one that really
Speaker 1: caught the attention of the the American public in particular
Speaker 1: was the deal to rename the Staples Center where the
Speaker 1: l A, Lakers and Clippers play. And that's a seven
Speaker 1: hundred million dollar deal over twenty years. And that arena
Speaker 1: had so much history in it over the past couple
Speaker 1: of decades with Kobe and Shack and and all the championships,
Speaker 1: culturally iconic things happened there. When people heard of what
Speaker 1: was it going to be called the Staples Center anymore,
Speaker 1: they've freaked out that. The fans, the players made comments
Speaker 1: about it, the coaches. It's a big change. And I
Speaker 1: don't know we're gonna inevitably there. There's probably gonna be
Speaker 1: some other some other stadiums that go this round. There's
Speaker 1: so many banks that are title sponsors of of stadiums
Speaker 1: so you know it seems inevitable. Up next, more with
Speaker 1: Bloomberg reporter kimbas Seen on how crypto sponsorships have been
Speaker 1: met with both open arms and hesitation in a tale
Speaker 1: of two footballs, So let's move to soccer, and I
Speaker 1: will only say soccer these two times before anybody on
Speaker 1: the other side of the original cringe. But so we've
Speaker 1: seen sort of a big spending from crypto there to
Speaker 1: why is that You're seeing some spending there even now,
Speaker 1: even in the last couple of months after after the crash,
Speaker 1: Like there are new deals worth millions with English Premier
Speaker 1: League teams Everton Manchester City signed of extended one of
Speaker 1: its one of its deals to it's like practice squad uniforms,
Speaker 1: so everything is just getting blanket and a lot of
Speaker 1: the teams also have tokens. Now it has definitely slowed down,
Speaker 1: but it doesn't appear to be stopping. So some companies
Speaker 1: have opted to sponsor football players directly, right, Like Cristiano
Speaker 1: Ronaldo has a sponsorship with finance, Why would they go
Speaker 1: down that route? And like how does that potentially clash
Speaker 1: with the club sponsorship? Right? Like could that instance ever
Speaker 1: arise where you're like have to competitors sponsoring the superstar
Speaker 1: players are you know, brands and businesses in their own right.
Speaker 1: On the platform's side, you want to have not just
Speaker 1: like a pitch person, but someone who can who can
Speaker 1: really carry your whole brand forward. And if you're working
Speaker 1: with someone the magnitude of Christiano Ronaldo or Tom Brady
Speaker 1: in the US, and then you're hoping that that will
Speaker 1: push you along. In terms of whether they bump up
Speaker 1: against each other, I haven't seen it yet, so I'm
Speaker 1: not I'm not quite sure. A lot of times we're
Speaker 1: saying the word crypto in a very broad sense in
Speaker 1: that you know the platforms and then like the the
Speaker 1: n f T services and and so on, they're not
Speaker 1: directly competing with each other a lot, and these exclusivity
Speaker 1: agreements may allow them to coexist. But since its alve
Speaker 1: so totally brand new, I guess we'll just have to see.
Speaker 1: You know, prices have been crashing. You were alluding to
Speaker 1: this before. My first question around this is, do you
Speaker 1: know athletes still want to be associated with it? Is
Speaker 1: the appeal of big cash persuasive enough? Like, has there
Speaker 1: been any change of minds recently or not? Really? If
Speaker 1: there's money in it for them, They're they're going to
Speaker 1: be attracted to it. So as long as there's something
Speaker 1: interesting to endorse, like we're gonna keep and they have
Speaker 1: the money to spend and they are willing to to
Speaker 1: spend those marketing dollars on sports, then we're going to
Speaker 1: keep seeing these deals. I think what we saw over
Speaker 1: the past month is TV spend on crypto sports ads
Speaker 1: just totally dip super far almost aid nothing. And you
Speaker 1: had ads with Tom Brady for fd X, she had
Speaker 1: ads with Matt Damon for Crypto dot Com. All just
Speaker 1: get taken off the air at least for now, but
Speaker 1: Dak Prescott's about to be out of the air for blockchain,
Speaker 1: so we'll see it's going to keep coming. And what
Speaker 1: about these deals with with companies right, like do you
Speaker 1: have any sense of whether they paid for them already? Like,
Speaker 1: are there any risks that someone might not be able
Speaker 1: to pay up? We saw I think in Italy there
Speaker 1: was you know, a rumor. I don't know if it's
Speaker 1: an actual story yet, but I think there was issues
Speaker 1: with one club and in the UK as well, where
Speaker 1: one of their sponsors wasn't able to pay, Like will
Speaker 1: we see more of that. A lot of these are
Speaker 1: very long term deals. So you know the Staples Center
Speaker 1: crypto dot com Arino one is twenty years for example.
Speaker 1: Some of them are two five. So these are annual
Speaker 1: payments that are locked in for so long so if
Speaker 1: anything happens. But but that's uh, the same with with
Speaker 1: all sponsors that they signed up for for one year
Speaker 1: or several years and it becomes an annual payment. But
Speaker 1: in this case, we have seen a couple things go under.
Speaker 1: I believe the the n of us L, that's the
Speaker 1: National Women's Soccer League in the US, one of its
Speaker 1: sponsors went under, and they were supposed to have Voyager
Speaker 1: went under. Yeah, yeah, and they were supposed to have
Speaker 1: payments out to the players that they warned may or
Speaker 1: may not still go through. And obviously long term, I
Speaker 1: don't think that that relationship is going to continue. All right,
Speaker 1: Thank you so much for joining us. Kim, of course,
Speaker 1: thank you so much for having me. You can find
Speaker 1: more of Kim's reporting on the Berg terminal, on Bloomberg
Speaker 1: dot com and on Twitter. Kim is at at k
Speaker 1: I M b h A s I N. I'm an
Speaker 1: erea Bloomberg crypto Senior editor in Today for Stacy Mary
Speaker 1: Ishmael on the next episode of Bloomberg Crypto. By some estimates,
Speaker 1: crypto hacks two have cost the industry close to two
Speaker 1: billion dollars. That's billion with a B. What could a
Speaker 1: hack resistant crypto industry look like? And what's taking so long?
Speaker 1: This is Bloomberg Crypto, a daily podcast from Bloomberg and
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Speaker 1: producer is Janet Babin. Our producer is Mohammed Faruk. Associate
Speaker 1: producer is Moses on Them. Associate producer is Thai Bubba
Speaker 1: Desta wonder At is our engineer. Original music by Leo Sidrin.
Speaker 1: I'm Stacy Marie Ishmael. Have a great weekend.