The popularity of cryptocurrency has begun to permeate every area of modern life and it seems that Friday night footy is no exception. The NRL recently announced its entry into a minimum three-year deal with Brisbane-based digital currency exchange Swyftx which will include naming rights to the in-game video referee review system known as ‘The Bunker’.

The NRL are almost late to the party with notable recent sporting-cryptocurrency collaborations in Australia including:

  • Salerno Law Partner TrigonX Trading signed on as an Executive Partner with the Gold Coast Titans over the next two seasons as cryptocurrency rises in popularity
  • Like the recent NRL deal, the AFL signed crypto.com as a major partner for both the Toyota AFL Premiership Season and NAB AFLW competitions and exclusive naming rights to the AFL Score Review, the agreement reported valued near $25 million
  • The South Sydney Rabbitohs have signed a deal with Sportemon Go, a physical and virtual tokenised sports start-up as it explores plans to release a series of digital assets as non-fungible tokens on the blockchain (NFTs)

Outside of Australia, the sponsorships and partnerships that have developed between elite sporting teams or leagues and crypto-connected businesses are becoming mainstream news.

crypto.com

The same company that signed with the AFL:

  • Last year paid US$700m for the naming rights to the former Staples Centre, home of the Los Angeles Lakers and Clippers basketball teams as well as the National Hockey League’s Los Angeles Kings for the next 20 years;
  • In September, announced sponsorship deals with both the Philadelphia 76ers basketball team and elite European football club Paris Saint-Germain;
  • In July entered a US$175m 10-year sponsorship agreement with the Ultimate Fighting Championship (UFC); and
  • In June signed a US$100m 5-year deal to have advertising space and trackside slots at races throughout the Formula 1 Championship season.

FTX

  • In August, the Hong Kong-based cryptocurrency derivatives exchange partnered with the athletic department of University of California Berkeley to secure the naming rights for its football stadium for the next 10 years, worth US$175m
  • In July, signed a five-year sponsorship deal with Major League Baseball (MLB);
  • In June, they paid $210 million for the naming rights to eSports Team SoloMid; and
  • In March, the first cryptocurrency company to secure naming rights to a major sporting venue when it purchased the naming rights for Miami Heat arena for the next 19-years to the tune of US$125m.

Future Focus: Sponsorship and Branding to Payments?

With the emergent rise of these technologies, it will likely not take long for the relationship between the sporting industry and digital assets to deepen. The possibility is on the horizon for player contracts to be part or fully paid in cryptocurrency as well as franchises working to drive fan engagement through team-specific or collectible non-fungible tokens.

Already, LA Rams star Odell Beckham Jr is being paid the entirety of his one-year contract in Bitcoin, both his US$750 000 base salary and the up to US$3 million in possible incentives. Fellow NFL franchise centrepiece Aaron Rodgers of the Green Bay Packers has also announced that a portion of his contract will be paid in Bitcoin. The NBA’s Sacramento Kings has expressed its willingness to pay salaries and transfer fees in cryptocurrencies while NASCAR driver Landon Cassill receives a fully cryptocurrency-backed compensation package from Voyager exchange.

At home, the Australian Baseball League’s Perth Heat signing with Bitcoin payments company OpenNode and pays all players, staff in cryptocurrency. The team also accepts payments for sponsorship, merchandise, and ballpark concessions in crypto.

Whether or not these trends emulate the bull run seen in 2017 with Bitcoin payments or become a solidified element in the sports industry remains to be seen. It will depend to a certain extent on whether governments around the world, including in Australia, can clear up regulatory uncertainty surrounding these assets. The clearer the distinctions between asset classes such as currency, asset-backed and pass-through tokens, the clearer the rules for exchanges, payment gateways and issuers of digital assets, the more likely that mainstream uptake of these technologies will occur.

More so when, rather than if, these changes occur, the requirement for sound legal advice experienced with cryptocurrency and similar assets will increase. If you have questions or concerns surrounding financial technologies, their applications or uses, please do not hesitate to contact our Cryptocurrency Team today.

By Josiah Neal