Sports fans who view their idols as role models might be hesitant to take their financial guidance. The bankruptcy of FTX and the arrest of its former CEO have raised doubts about the involvement of celebrity athletes such as Tom Brady, Steph Curry, and Naomi Osaka in the unregulated crypto landscape. This has shifted the discussion to the potential cost of loyalty to favorite teams and players.
Cryptocurrencies are digital money that uses blockchain technology to record transactions. It is not backed by a government or institution, which makes it a riskier investment.
This raises an ethical problem. Should sports stars be endorsing products that could potentially lead to financial losses for their fans? Or should followers be held responsible for any reckless behavior, regardless of who may be encouraging it?
According to Mark Pritchard, a professor of Central Washington University who studies the intersection of ethics and sports, “In hindsight, it was a reckless business partnership that put Curry and Brady in a difficult position. I’m not sure how much due diligence was done prior to the decision, but remember Warren Buffet’s quote, ‘Be fearful when others are greedy and greedy when others are fearful.’”
A few years ago, the union between sports and the blockchain was solidified. Despite the numerous issues that the sector is facing, the trend has been growing steadily. According to IEG Sponsorship Group, by 2021-22, crypto companies had spent $130 million on NBA sponsorships, a vast increase from the $2 million of the previous season.
Before its collapse, FTX had made deals with multiple sports organizations. The company paid $135 million to name the arena and an undisclosed amount for patches on MLB umpire uniforms. It also had advertising placements with Golden State Warriors and Miami Heat.
Even though these agreements were cancelled upon FTX’s filing for bankruptcy, there are still plenty of crypto deals available, including the estimated $700 million Lakers naming rights, now known as Crypto.com Arena, over 20 years. There are also cryptocurrency dealings in soccer, cricket, and Formula 1.
Many celebrities have also endorsed cryptocurrency, and some of their fans have followed suit and began investing. This led to the surprise of Ben Salus, a Philadelphia sports fan who lost money on crypto. He was taken aback by the sudden increase of crypto-related signage around his favorite teams.
“It’s a very strange transition, especially since I don’t know if the world was ready for the prominence of cryptocurrencies,” Salus stated. “You get these famous personalities endorsing things they or their teams may know little about.”
The debate has become even more complex in the last five years, with the convergence of cryptography, digital artwork offered in the form of non-fungible tokens (NFTs), legalized sports betting, and electronic gaming, as well as the ever-growing virtual metaverse, all of which have become increasingly popular with a large proportion of sports stars and enthusiasts.
“It’s much more connected than people realize,” said Ryan Nicklin, from his PR company, who examines the role of crypto in sports. “Because you can spend money on any of these metaverse games, you are essentially making a bet because you don’t know if the asset you have purchased will go up or down in value.”
Though sport was not the driving force behind the rise of crypto into mainstream culture, it was as a result of its increasing popularity that sports teams and leagues, as well as their athletes, started to capitalize on the new trends and make money.
“Many sponsorships have to do with emotional attachment,” said Brandon Brown, an instructor of business and sport at the Tisch Institute of Global Sport at New York University. “Therefore, it would make sense for these crypto companies to collaborate with a sports team or sports celebrity because there is an emotional bond that comes with that partnership.”
In 2020, a major moment happened when several players, including Pro Bowl Carolina Panthers lineman Russell Okung, announced that they would accept all or part of their multi-million dollar salaries in crypto. Shortly after the announcement, Okung tweeted, “I bought Bitcoin to be cash rich, not cash free.” In a matter of weeks, Bitcoin.com proudly announced
