- Bitci.com, a Turkish exchange, has just been ousted as the sponsor of two European football clubs and a third is reconsidering after it was unable to make payments.
- Crypto firms have spent billions of dollars on sports partnerships, with Crypto.com leading the pack, but are they biting more than they can chew?
It has now become rare to watch a sporting event without bumping into a cryptocurrency ad as the two industries become more intertwined with each passing day. But could the crypto firms be over-splashing on their quest to get more exposure? One Turkish exchange seems to have tried more than it could handle. Known as Bitci.com, it has now been ousted as the sponsor of two European football teams and a third is assessing the sponsorship after it was unable to meet its payment obligations.
Bitci.com has partnered with a number of football teams in Europe’s elite leagues. However, as Bloomberg reports, it has recently lost two of its partnerships. Sporting Lisbon, which plays in the Portuguese league and discovered a footballing great in Cristiano Ronaldo, ended the partnership which started in September last year. It was followed by Spezia, an Italian club which plays in the country’s Serie A.
As sources within Sporting Lisbon told Bloomberg, the decision to terminate the partnership was because Bitci failed to make the expected payments. Saying that it had made a “strategic disalignment,” the club has since removed all Bitci branding from its stadium, jerseys, and website.
Bloomberg further reports that Wolverhampton Wanderers, an English club that plays in the Premier League, is also reassessing its partnership with the Turkish exchange.
Away from football, McLaren Racing also recently terminated its relationship with Bitci. The two entities had announced their partnership in June last year, with a fan token expected to be released on the exchange as part of the deal, the first of its kind in Formula 1.
These moves by sporting entities begs the question – are crypto firms getting into too much too soon?
Audience crossover and crypto winter
In the past two years, some of the biggest crypto projects have splashed billions of dollars combined to sponsor sporting teams and events. Singaporean exchange Crypto.com is the undisputed leader in this field. It spent $700 million for the naming rights to the Staples Center, the home stadium of the L.A Lakers NBA franchise. The stadium is now known as the Crypto.com Arena. The $700 million was the most ever spent for naming rights in sporting history.
The exchange has also sponsored esports teams, Formula 1, the Ultimate Fighting Championship, NHL teams, French football club Paris Saint-Germain, and many more.
FTX, Coinbase, Sportsbet.io, Stake.com, Voyager, Algorand, Tezos, Polkadot, and many more companies and projects have also sponsored sports teams.
Read More: Tezos scores $27M deal with Manchester United as Baby Doge partners with TSG Hoffenheim
Steve Ehrlich, the CEO of Voyager says that the reason they invest is that ” there is a lot of crossover between an interest in crypto and sports fans.”
However, even with this crossover, crypto companies are having to spend much more than their counterparts. The $135 million that FTX exchange paid for the branding rights to the Miami Heat arena was reportedly way higher than what American Express had been paying for the same privilege.
For crypto businesses, there are other factors as well that have to be considered, such as a dip in crypto prices. Whenever prices go down, interest dips, and transaction volumes are much lower. This leads to reduced revenues, which some of the companies may not have factored in when jumping into the partnerships.
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