Cryptocurrency companies are being forced to shell out massive premiums in sports sponsorship deals as professional teams weigh the risks of getting burned — like some of them did during the dot-com bubble.
Crypto.com, a Singapore-based crypto trading site, reportedly paid $700 million for the naming rights to the Staples Center in Los Angeles for 20 years — more than five times what Staples had paid for the same rights in 1999.
And in March, Bahamas-based crypto exchange FTX ponied up $135 million to rename the home of the Miami Heat. That’s more than triple what American Airlines paid for naming rights in 1999.
Arena owners are able to demand more money from venture capital-flushed crypto firms because they’re relatively unknown names in an unproven industry, experts say.
“If you want to do a deal with Mercedes Benz, that’s safe,” Columbia University sports management professor Joe Favorito said. “If you go after a nontraditional naming rights deal, you probably ask them for a lot more money.”
That’s because arena owners remember stadiums named after long-gone tech firms such as Baltimore’s PSINet Stadium and Boston’s CMGI field — both of which had to be re-christened after their namesakes imploded when the dot-com bubble burst in 2001.