Crypto deals help propel NBA sponsorship money to $1.6 billion

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

Thiago Prudence | Images of soup | Light Rocket | fake pictures

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

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

“The wave of sponsorship submissions from the crypto category is unlike anything we’ve seen before,” said Peter Laatz, global managing director at IEG.

Crypto partnerships are now the second most lucrative sponsorship category for the NBA, behind the technology category alone. 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.

According to IEG, other categories expected to pay the NBA more than $100 million per year include banking, telecommunications and commodities. 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 earned $1.7 billion in endorsements last season. The NHL secured $676 million in sponsorships for the 2020-21 season.

IEG’s projections come as the NBA Finals kicks 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 20-year, $700 million deal for arena naming rights with the platform. And the Warriors signed a $10 million global rights deal with FTX, a crypto derivatives exchange. The company also secured the arena naming rights for the Miami Heat.

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

Jed Jacobson | National Basketball Association | fake pictures

Advertisements for NBA jerseys are on the rise

Another category that contributes to the bottom line of the NBA: advertisements on player shirts.

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

The terms of this agreement have not been made public. But league sources told CNBC that Rakuten will pay the Warriors more than $40 million per year. That’s over $20 million for the previous deal.

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

Jersey sponsorships have grown in professional leagues over the past year. The NHL, for example, added patches to uniforms and helmets during the pandemic. And MLB approved team uniform patches in its new player contract in March of this year. The NFL does not allow patches on uniforms.

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

League sponsorship revenue is expected to continue to grow.

The league’s data rights deal with Swiss company Sportradar, worth an estimated $1 billion, begins on season 2023-24. The NBA’s television contract also expires after the 2024-25 season and sports executives expect it to eclipse its current value of $24 billion, or roughly $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 agreements, companies also agree to buy advertisements for NBA national games.

For regular season 2021-22 games, domestic ad spend for NBA games reached $470.7 million, according to media tracking firm iSpot.

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Crypto deals help propel NBA sponsorship money to $1.6 billion

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