The NFL's Stance On Crypto Partnerships

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Hey Friends,

The National Football League (NFL) wants to do its due diligence on digital assets, announcing through a league-wide memo last month that teams could not sell sponsorships to cryptocurrency trading firms.

The memo, which The Athletic first reported, reads:

The memo also prohibits teams from selling non-fungible tokens (NFTs), or unique digital assets that represent ownership of real-world items like art, video clips, music, and more.

On one hand, this announcement surprised a lot of people. The NFL’s New York Giants named Grayscale Investments their official digital asset currency partner earlier this year. At the same time, crypto exchanges like FTX and Crypto.com have collectively spent more than $1 billion on major sports partnerships in the last 12 months.

Recent Sports & Crypto Marketing Deals

• FTX signed a 19-year, $135 million agreement to become the naming-rights sponsor for the Miami Heat’s arena, making them the first crypto exchange to sponsor a major US professional sports venue.

• FTX signed a 10-year, $210 million naming rights deal with esports organization TSM, the largest deal of its kind in competitive gaming history.

• Crypto.com is paying the UFC $175 million over ten years to become its first official crypto platform partner and secure branding on fight kits worn by UFC athletes and their corner team in competition.

• Crypto.com signed a five-year deal with Formula One worth more than $100 million, which includes brand presence around F1 events.

As if that wasn’t enough evidence of the sports & crypto trend, there have also been several NFL athletes that have publicly backed crypto with their own money.

• Saquon Barkley, former #2 overall pick and current running back of the NY Giants, announced in July that he would be taking 100% of his $10 million annual endorsement income in bitcoin from now on.

• Trevor Lawrence, the #1 overall pick by the Jacksonville Jaguars, signed a deal with Blockfolio earlier this year, which included a signing bonus that was paid exclusively in crypto.

• NFL lineman Russell Okung announced in December 2020 that he was converting half of his $13 million annual salary into Bitcoin when the price was at $27,000.

But on the other hand, the NFL’s announcement shouldn’t be that surprising. Think of it this way — the NFL has long been a second-mover when it comes to exploring new marketing partnerships.

They initially prohibited alcohol companies from marketing through their channels and spent millions of dollars over decades lobbying against sports gambling in the United States, both of which fell by the wayside when billions of dollars came rolling in.

For me, this memo is much more about their approach to monetization. The crypto industry is growing, that much is clear, but I believe the NFL wants to monetize through a top-down approach. Let me eat first, then you can eat, per se.

There are rumors that the NFL is looking to announce a platform similar to NBA Top Shot, the NFT-based platform that Mark Cuban estimates will eventually be a $1 billion-plus business for the NBA. That would make sense.

But more so, I think the NFL just wants to appropriately capitalize on monetization before enabling individual teams to do so themselves.

If FTX is paying $210 million for naming rights to an esports organization or $135 million for the naming rights to an NBA arena, what does that make the NFL worth? The answer is billions, but it becomes much more complicated if individual teams sign competing deals beforehand.

I think we’ll see the league office do its due diligence over the next 6-12 months, and after getting comfortable with the industry’s long-term potential to be solvent, they’ll announce a slew of exclusive partnerships to financially capitalize as other sports leagues have. Until then, individual teams will just have to sit and wait.

I hope each of you has a great day. I’ll talk to everyone tomorrow.

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Huddle Up is a daily newsletter that breaks down the business and money behind sports.

If you would like to join more than 47,000 other professional athletes, business executives, and casual sports fans that receive it directly in their inbox each morning, subscribe now.

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