Following the November 2022 bankruptcy filing of cryptocurrency exchange FTX, US-based Coinbase has officially announced its foray into sports sponsorships. Coinbase's sponsorship of an NBA team marks it as one of the first US cryptocurrency exchanges to re-enter the sports sponsorship market after FTX's collapse. This move symbolizes the cryptocurrency industry's attempt to rebuild its relationship with the sports world after navigating market downturns and the FTX fallout.
In October, Coinbase revealed multiple partnerships, including one with the NBA's Golden State Warriors. It's noteworthy that the Warriors' previous sponsorship agreement with FTX, signed in December 2021 and encompassing NFT issuance and Bitcoin donations to local non-profits, ended abruptly less than a year later with FTX's bankruptcy.
Mike Kitts, the Warriors' Chief Commercial Officer, stated that the partnership with Coinbase aims to "leverage blockchain technology to build community among fans." Coinbase has now established partnerships with various basketball-related organizations, including the WNBA, NBA, NBA G League, and NBA 2K League.
Coinbase's move is seen as filling the void left by FTX's collapse as the Warriors' cryptocurrency sponsor. The 2022 cryptocurrency market crash and FTX's bankruptcy led to the termination of many crypto-related sports sponsorships. However, other cryptocurrency companies are actively seeking new partnerships. For example, Crypto.com signed a deal with the UEFA Champions League in August, and Coinbase, along with blockchain company BlockDAG, partnered with German football club Borussia Dortmund.
At its peak, FTX had sponsorship deals with numerous high-profile athletes, including Shaquille O'Neal, Naomi Osaka, and Tom Brady, even securing naming rights for the Miami Heat's arena (FTX Arena) until 2040.
It's important to note that following FTX's bankruptcy, its creditors are actively pursuing the recovery of sponsorship fees previously paid by FTX. These funds are alleged to be linked to the misappropriation of funds by FTX's sister company, Alameda Research, a case that has also been raised in the criminal trial of former FTX CEO Sam Bankman-Fried. Coinbase's actions are not merely a business strategy but also represent the cryptocurrency industry's proactive attempt to rebuild its reputation after a significant crisis of trust.
