The most fertile ground for this rapid rise is understandably that of ‘tier one motorsport’, i.e. the top series of two- and four-wheel competition. This can come as no surprise. Formula 1
, Formula E
are supranational platforms, extremely popular, with a young and tech-savvy public and, above all, characterised by a top-level technological, digital and innovation profile, which fits in well with the many nuances of this ‘new finance’.
It is precisely the multiplicity of these nuances and their continuous and extremely rapid change that is one of the salient features of the world of crypto, NFT, decentralised exchanges and new trading: freed from nagging legislation and backward-looking regulators, these new economic instruments have rapidly adapted to the needs and demands of consumers, sometimes satiating existing appetites and sometimes whetting new ones.
There are more than 18,000 cryptocurrencies currently on the market
, although only a fraction of these have sufficient popularity and value to gain international dignity and exposure. This extraordinary competition (not to mention what happens in the exchanger or NFT market) requires the major players to turn to communication tools that distinguish them from the masses and raise their perception in the eyes of the consumer. In fact, it is no secret that the reputation of these tools, often considered risky, is the first obstacle to be overcome for these newco’s. Sponsorship, cryptocurrencies, etc., are all part of this.
Sponsorship, crypto and Formula 1
To date, Formula 1 is probably the ultimate object of desire for decentralised finance companies. After a revival in terms of regulations, image and management, Formula 1 is in an extraordinary state of health. This is demonstrated by the numbers, both in terms of television ratings and – above all – of the public at the track. For example, more than 475,000 fans took to the track over the three-day Melbourne weekend for the April 2022 Australian Grand Prix, making it the biggest sporting event in the history of the southern continent.
Almost every Formula 1 team on the grid today has a sponsorship or partnership in cryptocurrencies, tokens, blockchain and decentralised finance. Some teams, such as Red Bull, have even had the foresight to further subdivide the product category, thus making room for new and more partners. Summing up the current situation:
Alfa Romeo: Floki, Socios
Alpha Tauri: Fantom
Red Bull Racing: ByBit, Tezos
What is impressive is not only the number of agreements, which will grow and become even more specialised as in the case of Red Bull
, but their value. The recently signed deal between ByBit and Red Bull Racing is worth around $50 million a year, while Crypto.com
‘s deal with the Championship
is worth $100 million.
It is now clear that the queen of open-wheel racing has become the “place to be” for an industry worth billions of dollars and set to grow. If we want to exaggerate the concept a little, it is not wrong to say that sponsorship in F1 is a seal of value, relevance and reliability for these companies. It is no coincidence that the biggest players in the sector, such as Binance (the world’s leading cryptocurrency exchanger), are raising staggering sums to be present in the championship.
The present and future of sponsorship for cryptocurrencies, NFTs and exchanges
Before giving way to a brief history of crypto-sponsorships (understanding the past is always important for analysing the future), it is not wrong to take a look at the present and immediate future of this massive industry trend.
It is clear that what we are experiencing today, in Formula 1 but in all top sports leagues, is just the beginning of a piece of sports marketing history. The mass arrival of crypto, NFT and blockchain is just the periscope of a submarine of titanic dimensions that will probably only reveal its tonnage in the next five years.
Having shaken off the nefarious aura of a not-always-crystal-clear reputation, today’s decentralised finance solutions have finally donned the skin of deep-pocketed, broadly financially supported operations with a huge, global, broad-shouldered user base. It is difficult to say what will happen to all these instruments, but it is also certain that they will represent a substantial and growing slice of the world’s finance and economy in the decades to come.
In the meantime, the sector, our sector, i.e. that of sports sponsorship
, must go back to the proverbial drawing board and put its hand to a series of theoretical and practical tools capable of providing new answers to new problems, avoiding finding itself unprepared for the wave of novelties and introductions that will necessarily arrive. In fact, it is clear that the needs of these new realities are quite different from those, well known, of the traditional corporations of the past. Marketing benefits, flexible agreements and new approaches must therefore form the basis of a new chapter in sports marketing and sponsorship, which now sees the central role of exposure – both online and offline – as a key factor, and which must instead re-evaluate the weight of the many one-to-one activations that have always played the lion’s share in the past.
It’s a very rapid, constant evolution that won’t take much longer, and will involve properties, agencies and professionals. Once again, they have no choice but to embrace the change.
The story: beginnings and sponsorships in 2014
In 2014, the world of professional sports received an injection of money from a hitherto unimagined source. As bitcoin approached $1,000 for the first time, crypto-economy companies jumped into the world of sports sponsorships.
Jamaica’s bobsled team made it to the Sochi Winter Olympics after raising $30,000 in Dogecoin (one of the most popular cryptocurrencies, which carries the internet meme’s famous Shiba Inu dog as its logo), Florida’s St. Petersburg Bowl was renamed the “Bitcoin” St. Petersbrurg Bowl by the BitPay brand, and the Dogecoin community on Reddit raised $55,000 to sponsor NASCAR driver Josh Wise’s car.
Globally, sports sponsorship is a $40 billion industry: an absolutely unmissable arena for those, like e-currencies, who need credibility and visibility. Most tokens, in fact, are not backed by actual economic resources or value fees, and it is therefore obvious that awareness, popularity and high visibility are the main marketing goals of industry players.
However, after a huge surge in 2014, the boom in crypto sponsorship in the world of sport has suddenly come to an end. With the price of bitcoin collapsing at the end of 2014, sponsorship money dried up and crypto companies had to think more about rebuilding on the rubble than investing in the future. At least until now.
The Crypto Sponsorship Boom of 2018
Dragged along by a sharply rising stock market, crypto-sponsorships are making a comeback in early 2018.
CashBet, a US gaming tokens company, kicked things off in January by signing a sponsorship deal with Arsenal, a deal that saw CashBet’s ICO (the Initial Coin Offering, one of the main funding schemes for cryptocurrencies advertised on LEDs on the sidelines.
In July Crypto Exchange CoinDeal became the sleeve sponsor of Wolverhampton FC, and in October social trading platform eToro signed a deal to sponsor Tottenham Hotspur and six other Premier League teams, a deal that paid off in bitcoin.
“From the beginning we had a plan to mark our presence globally. We wanted great players and great brands, and the best of football globally is the Premier League, because of the spectacle it provides and the boundless passion of the fans,” Kajetan Mackowiak, CoinDeal’s co-founder and chief marketing officer, told Forbes.
British football obviously has global appeal, but crypto-sponsorships are already expanding beyond football. Last October, the British Masters golf tournament was sponsored by LIFElabs, creator of the LIFEtoken cryptocurrency, a third of which goes to philanthropic causes.
Luke Chittock, CEO of LIFElabs, told Forbes that the Masters was just the beginning of a much broader marketing programme: “We’re looking to diversify the impact of the brand across different sports. We’re looking to diversify the brand’s impact in different sports. We want to range from motor racing to winter sports, football to swimming.
Leaving the UK, 25% of the Rimini F.C. football team was acquired by sports investor Heritage Sports Holdings (HSH), a purchase that was made in digital currency Quantocoin and saw the token itself become the team’s jersey sponsor.
Pablo Victor Dana, founder of HSH, told Forbes that after the Rimini acquisition he would “be approached by several other teams willing to receive Crypto / Quatocoin in exchange for shares. One of them in England.
Part of this article is a translation of the article "Crypto Sponsorships are Heating Up (again)" by Oliver Smith and published in Forbes on November 15, 2018