Amidst turbulent times in the crypto markets, MLB’s Los Angeles Angels and the NBA’s Washington Wizards have lost out on major sponsorship deals. Reports from the New York Times suggest that an unnamed crypto company decided to drop the Wizards’ deal and US-based exchange FTX withdrew from discussions to sponsor the jersey patches on Angel’s jersey.
Market Volatility Continues To Affect The Industry
With both partnerships crashing out due to the market slump, it’s just another sign of the times. Many crypto firms’ high liquidity is based on crypto and with the markets as low as they are, companies are scrambling to secure client funds and ensure they can stay afloat as we wait for market stability.
But, the outlook is bleak and we’re seeing many companies taking drastic measures to ensure they don’t fold. This extends to receding job offers and making severe staff cuts—with major US exchange Coinbase letting go of 1,100 employees last week, some 18% of its entire workforce—as well as blocking client withdrawals.
The Times Have Changed
Let’s reward back to the start of 2021 when industry sponsorship deals were a daily news item. The UFC struck a $175 million deal with American exchange Crypto.com back last year, as well as inking a 20-year agreement with the legendary Los Angeles Lakers, reportedly worth some $700 million.
Elsewhere, major US exchange FTX grabbed the naming rights to the Miami Heat’s arena in 2021. In fact, according to sponsorship consultancy firm IEG, the NBA received more than $130 million from crypto brands in the 2021/22 season, a huge increase from the previous campaign.
However, things have changed in 2022, with the majority of brands moving in the other direction. The company that spent $700 million in a deal with the Lakers, just laid off some 260 workers this month, amounting to around 5% of its workforce.
Market Volatility Persists
We saw the price of Bitcoin dropping below $21,000 earlier this month, hitting the lowest it’s been since 2020. At the time of publishing the price of Bitcoin is around $20,637, showing that the market slump is persistent.
Many industry pundits and experts predict the current situation to continue throughout the summer and into the autumn. The major US market, the NASDAQ, is also down 25% year-on-year. While this may be true, often the market does the opposite of expectations.