Crypto deals help propel NBA sponsorship money to $1.6 billion

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

Thiago Prudencio | Soup Images | Light Rocket | fake images

Cryptocurrency companies helped propel NBA sponsorship revenue to a record $1.6 billion in the 2021-22 season, according to estimates by IEG, a sports association consultancy.

That’s 13% more than the $1.4 billion from the 2020-21 season. In the 2018-19 season, the National Basketball Association raised $1.2 billion in sponsorship money. Sponsorship deals can include deals for stadium naming rights and for companies to put their names or logos on player jerseys.

“The wave of cryptocurrency category sponsorship submissions is like nothing we’ve seen before,” said Peter Laatz, IEG’s global managing director.

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

Other categories estimated to pay the NBA more than $100 million annually include banking, telecommunications and merchandise, according to IEG. Companies spending at least $50 million include Anheuser-Busch, Pepsi, and AT&T.

Among the four major sports leagues, the NBA ranks third in sponsorship revenue. The NFL ranks first with nearly $2 billion in sponsorship deals for its 2021 season, according to IEG. And in March, CNBC reported that MLB made $1.7 billion in endorsements last season. The NHL secured $676 million in sponsorship money for the 2020-21 season.

IEG’s projections come as the NBA Finals kick off on Thursday, when the Golden State Warriors host the Boston Celtics in Game 1 at Chase Center.

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

Jayson Tatum #0 of the Boston Celtics drives to the basket during the game against the Golden State Warriors on March 16, 2022 at the Chase Center in San Francisco, California.

Jed Jacobson | National Basketball Association | fake images

NBA jersey ads on the rise

Another category that helps the NBA bottom line: ads on player jerseys.

The NBA is expected to bring in more than $200 million this season from jersey patch deals. They include the Brooklyn Nets who got $30 million per season from brokerage trading platform Webull in September 2021. The deal led the NBA at the time, but the Warriors were in first place earlier this month when they renewed their deal. with the Japanese e-commerce company Rakuten. .

Terms of that deal were not publicly disclosed. But league sources told CNBC that Rakuten will pay the Warriors more than $40 million annually. That’s more than $20 million for the previous deal.

The people spoke to CNBC on condition of anonymity because they cannot publicly discuss team deals.

Shirt sponsorships have expanded in professional leagues over the last year. The NHL, for example, added patches to uniforms and helmets during the pandemic. And MLB approved team uniform patches in its new labor agreement with players in March of this year. The NFL does not allow patches on uniforms.

Increased revenue from ads on uniforms and other sponsorship deals could help the NBA reach its total projected revenue of $10 billion this season. NBA Commissioner Adam Silver said total revenue in the 2020-21 season was down about 35% from the previous year after the pandemic cut the season to just 72 games. Revenue in the 2019-20 season, which was also partially affected by the pandemic, was $8.3 billion, down from $8.8 billion in 2018-19.

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

The league’s data rights deal with Switzerland-based Sportradar, reportedly worth $1 billion, begins in the 2023-24 season. The NBA’s television deal also expires after the 2024-25 season and sports executives expect it to dwarf its current value of $24 billion, or about $2 billion per season. The NBA also has a merchandise deal with e-commerce powerhouse Fanatics and a deal with Dapper Labs, the creator of NBA Top Shot NFTs.

In league deals, the companies also agree to buy ads for national NBA games.

For 2021-22 regular season games, national ad spend on NBA games reached $470.7 million, according to media tracking company iSpot.

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