Crypto.com Backtracks on $495B UEFA Champions League Sponsorship Deal
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Prolific sports investor and crypto company Crypto.com has pulled out of a $500 billion sponsorship deal with the UEFA Champions League.
Crypto.com had previously emerged as an investor when European football association UEFA dropped its main sponsor Gazprom. At that time, UEFA had mentioned Gazprom’s connection with Russia as the reason for the drop. Hence Crypto.com signed a contract that would last for five seasons. The supposed deal would cost about $100 million a year and run until 2027.
However, just before finalizing the deal, a major crypto company has drawn out unexpectedly. Crypto.com cites licensing regulatory issues in France, the UK and Italy as the reason for this move.
History of Crypto.Com Sports Sponsorship Deals
Regardless of the developments, Crypto.com still has a famous reputation as a prolific sports investor. In November of last year, the startup bought the 20-year right to rename the Los Angeles Staples Center for $700 million. The center is now called the Crypto.Com Arena, and the company announced a 9-figure renovation plan in late August.
Another major change is a $25 million five-year sponsorship with the Australian Football League. In addition, the company recently signed a deal to finance the Aston Martin team while partnering with Formula 1 in its sprint series. Crypto.com has also reportedly signed Hollywood star Matt Damon for a TV commercial.
To meet its lofty goals, the platform has applied for licenses in several countries over the past two months, including Italy, Singapore and Cyprus. In addition to the Emirati provisional license, the company also made similar successful registrations in South Korea and the UK this year.
Speculation suggests that a market crash could be to blame
While Crypto.com’s team points to regulatory issues, many believe the waning crypto winter may be to blame for the company’s sudden retreat.
In fact, analysts estimate that crypto companies have spent more than $2 billion on sports sponsorships in the past three years. With the crypto market having lost more than $2 trillion so far in 2022, there are doubts about whether companies can keep up with the bleeding.
Many have already reduced their staff, and Crypto.com is no exception. The cryptocurrency company, like a few others, announced in June that it was laying off 5 percent of its workforce. Since the market is not much better even after four months, Crypto.com may take some cautious steps.