Back in 2009, a lifetime deal signed by office retail company Staples and arena operator AEG ensured that the current home of the Los Angeles Lakers, Clippers and Kings would be called Staples Center for as long as the building is standing.
Last week, however, AEG announced that the historic venue will become the Crypto.com Arena as part of a 20-year partnership with the cryptocurrency exchange worth some US$700 million. That makes it the most lucrative naming rights deal in history, eclipsing the reported US$625 million SoFi is paying to sponsor the Los Angeles home of the NFL’s Chargers and Rams.
So what, exactly, happened to that lifetime deal?
I asked that very question to Russell Silvers, one of the co-chief operating officers for AEG Global Partnerships, who was at the heart of the negotiations with Crypto.com. He told me that AEG quietly bought back the naming rights from Staples in 2019, which freed up the company to talk to other brands.
One would be forgiven for thinking that AEG might have been regretting that decision when the pandemic struck just months into 2020, leading to a collective belt-tightening among even some of the biggest traditional spenders in sports sponsorship. Silvers acknowledged that Covid was “really tough” on the industry as a whole, but suggested that the cryptocurrency sector soon offered an alternative.
“The cryptocurrency platform category is arguably the fastest-growing category within our industry,” he said. “[With] Crypto.com being the leaders in the space on their end, and us being the leaders in the live sports and entertainment space, it really became a conversation of how can we connect our two brands together and look to do something iconic in nature and longstanding – to really create a new fan experience, to help the community, and [work on] sustainability.
“The conversations were very thoughtful and very fruitful. And fast.”
Crypto.com has invested significantly in sports sponsorship this year, striking deals collectively worth hundreds of millions of dollars with the likes of Formula One, the UFC and the NBA’s Philadelphia 76ers. Silvers admitted that those “big iconic deals” were something that AEG “took notice of”.
If that’s something that down the road is important to both partners, us and them, then we will look at pursuing the integration of new enhanced technology within the building.
Russell Silvers, co-chief operating officer, AEG Global Partnerships
In terms of inventory, Crypto.com’s branding will be displayed on signage at the 20,000-seater arena and the company will have a 3,300 square-foot activation space at the building’s entrance, in addition to other branded areas on the main concourse. However, the press release made little mention of whether the partnership would result in the acceptance of cryptocurrency at the venue, which has been a feature of recent deals between sports properties and brands in the space.
“From the onset that is not part of the initial partnership,” Silvers confirmed. “However, as we continue to pursue the partnership with them, if that’s something that down the road is important to both partners, us and them, then we will look at pursuing the integration of new enhanced technology within the building from that adoption standpoint.”
While the recent flurry of cryptocurrency deals has provided a welcome boost to the sports sponsorship industry, it hasn’t been cause for universal celebration. There are those who have urged caution about using sport to promote the new payment method to impressionable fans who might not fully understand the currency, while many remain wary of the continued absence of regulation in the space.
Silvers is hopeful that AEG’s partnership with Crypto.com will at the very least help to educate consumers.
“When we first had the narrative with them (Crypto.com) as to what our vision was for the next 20 years, they were very aligned with it,” he said, “because one of the things that they want to do is begin to educate people on the cryptocurrency platforms and to understand what that is and how they believe – and we believe – that this could be something where they could educate the community. They can educate our partners about what this cryptocurrency platform is and will be over the next 20 years.
“So again, for them, this was an opportunity not only to amplify their brand, but also to educate folks as to what the next 20 years of this cryptocurrency platform is going to be.”
Indeed, the length of the deal arguably represents the sports industry’s biggest endorsement of cryptocurrency’s longevity to date. With that in mind, it was no surprise to see Kris Marszalek, Crypto.com’s chief executive, hail the partnership as a red-letter day – the moment when cryptocurrency ‘crossed the chasm and went mainstream’.
That may or may not turn out to be true, but an increasing number of sports properties appear to be coming round to the idea – and with the size of the cheques on offer, how could they not?
Staples Center will become the Crypto.com Arena from Christmas Day
Legitimate concerns
Although the likes of Crypto.com and FTX have been spending this year using sponsorship to build credibility, the past week has seen two companies tied to cryptocurrency lose theirs.
First, Spanish soccer side FC Barcelona terminated their relationship with Ownix after Moshe Hogeg, a consultant linked to the NFT marketplace, was arrested over crypto-related fraud and sexual assault allegations. Then, Premier League champions Manchester City suspended their partnership with cryptocurrency firm 3Key Technologies just days after it was announced, primarily because there were genuine concerns as to whether the startup actually exists.
As Giles Morgan wrote this week on the SportsPro pages, the collapse of both deals should serve as a reminder that rights holders need to tread carefully when choosing who to partner with, especially in the murky, emerging world of crypto.
How are you feeling?
That’s the question Nike is asking with its new content series called ‘Nike Mind Sets’, which aims to help people improve their mental health through exercise.
Produced in partnership with the AnalogFolk creative agency, Nike Mind Sets includes an audio guided walk and run programme, a podcast about burnout and new Nike Running Club badges for prioritising mental wellbeing. The initiative is going to be rolled out across the entire Nike ecosystem, including its social media platforms and website, and will also be promoted by sponsored athletes and influencers.
Several high-profile athletes have publicised their own struggles with mental health over the past 12 months, including Nike-sponsored Naomi Osaka, gymnast Simone Biles and basketball player Ben Simmons, so it’s only natural that brands are starting to incorporate more messaging around wellbeing into their marketing efforts.
Even so, it feels close to a change of course for a brand that has spent over 30 years telling people to ‘just do it’.
Nike has unveiled a new content series focused on mental wellbeing (Photo via AnalogFolk)
Top dealers
Returning for their second appearance in this section are Angel City FC, whose innovative sponsorship philosophy – whereby a portion of the money they receive from partners is donated to local causes – appears to be resonating with brands.
The franchise has already found sponsors for all of its available kit inventory ahead of its inaugural season, but the past month has seen the club add further deals with financial services company Klarna, the Yaamava Resort and Casino, and payroll software and data company Payscale.
Based on my counting, the team now lists 15 partners on its website.
Five deals you might have missed
- NWSL’s Nike extension is league’s ‘most substantial’ sponsorship deal to date
- World Rugby partners with Land Rover ahead of 2023 World Cup
- Shohei Ohtani joins FTX as global ambassador in long-term partnership
- Football Ferns secure Ford sponsorship deal ahead of Women’s World Cup
- Chennai Super Kings score ‘US$13.4m’ TVS Eurogrip shirt sponsorship
Three things I’ve been reading
1. It’s been all change at the United Rugby Championship, which this year has launched a new brand identity and entered into various entertainment-focused partnerships, the latest with music platform Equity Distribution. I recently spoke with chief executive Martin Anayi about all that and more.
2. NFL chief marketing officer Tim Ellis and Ian Trombetta, the league’s senior vice president of influence marketing, have been talking to AdWeek about how the organisation has “refocused” and “taken a fundamentally different approach” to its marketing in recent times.
3. Cristiano Ronaldo caused a stir this year when he removed two Coca-Cola bottles from view during a press conference. Now, a new report has claimed that the 2021 summer of sport was exploited by the food and drink industry to ‘deluge families’ with junk food advertising, including during Euro 2020, the Tokyo Olympics and The Hundred cricket competition.
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