Get ready for a boom in crypto sports sponsorship: 'We're in discussions with over 70% of the Premier League'
- Cash-rich crypto companies are turning to sports sponsorship to advertise as platforms like Google and Facebook crack down on ads.
- Soccer is one of the most popular sports for crypto companies given its global appeal.
- English Premier League teams Arsenal and Wolverhampton Wanderers have both signed crypto deals and players like Eden Hazard and Lionel Messi also have endorsement deals in the space.
- A specialist in crypto sports marketing told BI he is in discussions with the majority of Premier League teams but executives remain wary after high-profile crypto scams last year.
LONDON - Cash-rich crypto companies are keen to strike sports sponsorship and endorsement deals as companies such as Google and Facebook crack down on crypto adverts on their platforms.
Polish cryptocurrency exchange CoinDeal last week struck a deal to become a shirt sponsor of Wolverhampton Wanderers, an English soccer team that has just been promoted to the Premier League. Arsenal struck a similar crypto sponsorship deal in January of this year.
Singh spent 10 years in the foreign exchange industry and left FX company LMAX earlier this year to set up Van Hawke, a specialist sports marketing company catering to FX and crypto.
"Where crypto is now, in terms of the advertising restrictions, is where FX effectively was 10 years ago straight after the financial crisis, where regulation was heavily imposed as to what could be done," he said.
While there is no regulation on cryptocurrency advertising in most parts of the world, many major online platforms have either banned or tightly rules around advertising on their platforms after a series of high-profile scams. Google and Facebook have both tightened regulations, while Reddit has been screening crypto ads since 2016.
"They're now looking at sports [as a way] in which they can reach that mass appeal," Singh said of crypto companies.
Crypto companies have raised billions of dollars over the last few years for early-stage projects that are often little more than PowerPoint presentations. The success of many of these projects depends on future mass adoption of the digital tokens that these companies intend to build and so reaching a large audience is key.
Soccer is popular because of the global appeal of the sport, Singh said. The English Premier League is broadcast in 212 territories and claims to reach a potential audience of 4.7 billion people.
"We're effectively in discussions with over 70% of the Premier League," said Singh. "Same as Formula 1 and Formula E. Those are our three biggest sports in terms of firms who are actively seeking category sponsorship. We're also speaking directly with agents in terms of their clients being brand ambassadors."
Argentinian soccer player Lionel Messi has signed on to promote a "blockchain phone". Colombia's James Rodriguez has issued his own cryptocurrency to promote a company and Belgium's Eden Hazard is promoting another venture.
However, Singh said sports executives remain wary of the sector given high-profile scams and blow-ups last year. He highlighted the example of boxer Floyd Mayweather, who helped promote an "initial coin offering" that netted founders $33 million. The SEC charged two of the people at the heart of the project with fraud earlier this year.
"Obviously with the flurry of scams in the latter part of 2017, you have to be more stringent than ever," Singh said. "A lot of the questions that we get from the rights holders is, they're now coming to us and asking us to vet the inquiries they've received directly from brands.
"There are discussions taking place behind the scenes and I think it's something we'll see a lot more of in the near future," he said. "Just like any new market, it will take time."