Opinion: Crypto brands’ sporting land-grab is only just beginning
As Lionel Messi and Fifa become the latest to do huge deals with cryptocurrency and blockchain-related brands, sports sponsorship expert Henry Nash of Octagon assesses the major new player in the market.
I suspect I wasn’t alone in thinking the Nielsen 2022 Global Sports Marketing Report would be a story of Covid’s brutal impact on the sports and entertainment industry.
Whilst sport seems to have recently returned to some modicum of normality, two years of reduced fans in stadiums, furloughing of staff and ill-advised breakaway leagues suggest it hasn’t been a rosy period. But as it turns out, I was wrong.
The report shares how digital connectivity has widened fan engagement with brands, with 40.7 per cent of global fans now streaming live sports events. Fans are also looking for trusted brands that are more purpose-led with a global commitment to social impact. And, as expected, sponsorship expenditures continued to grow in 2021, seeing a 107 per cent rise on 2020.
Everything seems to be fine and dandy in the world of sport, then, and I should simply end this here. Except one thing stood out: a new entrant into the world of sponsorships that is almost single-handedly responsible for the rise in expenditure. Crypto.
That overarching term is used to describe anything from fan tokens, currency trading platforms, NFT marketplaces, and blockchain platforms. These firms are queuing up in a major way to get a piece of the sporting action.
According to Nielsen, investment in sports sponsorship from crypto will increase 778 per cent by 2026. The massive budgets of crypto-related brands and platforms have clearly influenced sports rights holders at a time when the industry is sensitive to commercial pressures.
It’s no surprise that sports media platforms, leagues, and teams are happy to roll out the red carpet for those willing to pay top dollar. It may seem unbefitting of football clubs simply selling prime inventory to the highest bidder, but fans are mostly happy to accept this especially if it strengthens the clubs’ spending power and investment in the best players.
While Rwanda may not be first on everyone’s list of holiday destinations, nor may we care to spend too much time thinking about our car tyres, these sponsorships do at least help pay the team staff and player contracts.
Concern over sports sponsors comes in waves. Only a few years ago, we saw the influx of betting firms treat fans like walking billboards, with massive investments in football kit sponsorships by betting brands. Now in many areas we are seeing crypto brands taking a similar approach with the same loyal real estate. And the synergies go on.
For crypto, there is still a long road ahead in educating fans as to what’s actually in it for them. Is this a future ownership model for football clubs? If so, brilliant – show me where to sign. At present it all seems like one-way traffic.
The reality is, as with betting firms, the crypto market continues to evolve, and the land-grab has only just started. It may be years before mass adoption, where we will start to understand which elements of crypto, and which brands, will have the most impact on sport and the fan experience.
If governments and tax authorities suddenly decide they want some of the rewards, this movement could quickly change. However, one thing always remains true: certain brands will quickly jump to be featured on kits, stadiums, and signage seen by the most loyal and passionate consumers in the world.
Henry Nash is head of planning at Octagon, a global creative, marketing, and talent management agency specialising in sport, entertainment and culture.