Prolific sports investor and crypto firm Crypto.com has reneged on a $500 billion sponsorship contract with the UEFA Champions league.
Crypto.com had previously stepped up as an investor when the Union of European Football Association (UEFA) dropped its principal sponsor, Gazprom. At the time, UEFA had cited Gazprom’s affiliation with Russia as its reason for the drop. Consequently, Crypto.com stepped up to bag in a deal that would last 5 seasons. The supposed contract would cost approximately $100 million annually and last till 2027.
However, just before finalizing the agreement, the major crypto firm has pulled out unexpectedly. Crypto.com is citing regulatory issues with licensing in France, the United Kingdom, and Italy as the reason for this move.
Crypto.Com History of Sports Sponsorship Deals
Regardless of the development, Crypto.com still has a famous reputation as a prolific sports investor. In November last year, the platform purchased a 20-year-long right to rename the Los Angeles Staples Center for $700 million. The center is now named the Crypto.Com Arena, with the company publicizing a 9-figure renovation plan in late August.
Another notable move is the $25 million 5-year sponsorship with the Australian Football League. In addition, the firm recently signed a contract to finance the Aston Martin team while partnering with Formula 1 in its sprint series. Crypto.com has also purportedly signed Hollywood star Matt Damon for a TV advert.
To match its lofty ambitions, the platform has been filing for licenses in various countries in the last two months, including Italy, Singapore, and Cyprus. Asides from an Emirati provisional license, the company likewise made similar successful registrations in South Korea and the UK this year.
Speculations Suggest Market’s Crash Could be Responsible
While Crypto.com’s team points to regulatory troubles, many believe the bearish crypto winter might rather culprit in the firm’s sudden backtrack.
Indeed, analysts estimate crypto companies have spent more than $2 billion on sports sponsorship in the past three years. With the crypto market losing over $2 trillion so far in 2022, there are doubts companies can keep up with the bleeding loss.
Many have already downsized their staff, and Crypto.com is no exception. The cryptocurrency firm, like a few others, announced in June that it would lay off 5% of its workforce. With the market not much better even after four months, Crypto.com could be taking cautious steps.