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Cryptocurrency deals help boost NBA sponsorship money to $1.6 billion

In this photo illustration, the Coinbase logo is displayed on a smartphone with the NBA logo in the background.

Thiago Prudencio | sopa images | Light rocket | Getty Images

Cryptocurrency companies have helped boost NBA sponsorship revenue to a record $1.6 billion for the 2021-2022 season, according to IEG, a sports partnerships consultancy.

This is 13% more than the $1.4 billion in 2020/21. In the 2018/19 season, the National Basketball Association received $1.2 billion in sponsorship money. Sponsorship agreements may include naming deals for arena names and for companies that display their names or logos on players’ jerseys.

“Sponsored Cryptocurrency mailing is like nothing we have ever seen before,” said Peter Laatz, Global Managing Director of IEG.

Cryptocurrency partnerships are currently the second most profitable sponsorship category for the NBA, behind only the technology category. Among the NBA’s crypto deals this season was the league’s deal with crypto trading platform Coinbase. CNBC reported that the deal is worth $192 million over four years.

According to IEG, other categories estimated to bring in more than $100 million a year to the NBA include banking, telecommunications, and merchandise. Companies spending at least $50 million include Anheuser-Busch, Pepsi, and AT&T.

Among the big four sports leagues, the NBA ranks third in terms of sponsorship revenue. The NFL is in first place with nearly $2 billion in sponsorship deals for the 2021 season, according to IEG. And in March, CNBC reported that MLB earned $1.7 billion from sponsorships last season. The NHL has received $676 million in sponsorship money for the 2020/21 season.

IEG’s predictions are that the NBA Finals should start on Thursday when the Golden State Warriors take on the Boston Celtics in Game 1 at the Chase Center.

As for the team, the Los Angeles Lakers have signed a $700 million 20-year arena naming rights deal with Crypto.com. And the Warriors signed a $10 million global rights deal with FTX, a crypto derivatives exchange. The company also obtained the naming rights to the arena for the Miami Heat.

No. 0 Jason Tatum of the Boston Celtics hits the basket during a game against the Golden State Warriors on March 16, 2022 at the Chase Center in San Francisco, California.

Jed Jacobson | National Basketball Association | Getty Images

NBA jersey ads on the rise

Another category that helps the NBA make money is jersey advertising.

The NBA is expected to make over $200 million from patch deals this season. They include the protection of the Brooklyn Nets. $30 million per season from Webull brokerage trading platform in September 2021. That deal led the NBA at the time, but earlier this month, the Warriors overtook the top spot when they renewed their deal with Japanese e-commerce company Rakuten.

The terms of this deal were not made public. But league sources told CNBC that Rakuten will pay the Warriors about $40 million a year. This is more than $20 million for the previous deal.

The people spoke to CNBC on condition of anonymity because they are prohibited from publicly discussing team agreements.

Jersey sponsorship has expanded into the professional leagues over the past year. The NHL, for example, added patches to uniforms and helmets during the pandemic. And in March of this year, MLB approved patches on team uniforms in its new player employment agreement. The NFL does not allow patches on uniforms.

Growing revenue from uniform ads and other sponsorship deals could help the NBA hit a projected $10 billion in total revenue this season. NBA commissioner Adam Silver said total revenue for the 2020-21 season is down about 35% from the previous year after the pandemic cut the season down to 72 games. Revenue for the 2019-2020 season, also partially impacted by the pandemic, was $8.3 billion, up from $8.8 billion in 2018-2019.

The league’s sponsorship revenue is expected to continue to grow.

The league’s data rights deal with Switzerland’s Sportradar, reportedly worth $1 billion, begins at 2023-24 season. The NBA’s TV deal is also expiring after the 2024-2025 season, and sports executives expect it to eclipse its current $24 billion worth, or roughly $2 billion per season. The NBA also has a merchandise deal with e-commerce giant Fanatics and a deal with Dapper Labs, creator of the NBA Top Shot NFT.

In league deals, companies also commit to buying advertising for national NBA games.

In 2021-2022 regular season games, national NBA game advertising spending reached $470.7 million, according to media tracking company iSpot.


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