Crypto deals help boost NBA sponsorship funds to $1.6 billion

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

Thiago Prudencio | soba pictures | Light Rocket | Getty Images

Cryptocurrency companies helped boost NBA sponsorship revenue to a record $1.6 billion in the 2021-22 season, according to estimates by IEG, a sports partnerships consultancy.

This is a 13% increase from the $1.4 billion in the 2020-21 season. In the 2018-19 season, the National Basketball Association raised $1.2 billion in sponsorship money. Sponsorship agreements can include deals for arena naming rights and for companies to put their names or logos on players’ jerseys.

“The sponsorship of the crypto-class transmission is unlike anything we’ve seen before,” said Peter Latz, global managing director of IEG.

Crypto partnerships are now the second-highest-paying sponsorship category in the NBA, after just the technology category. Among the NBA’s crypto deals this season was the league’s agreement with the crypto exchange Queen Piece. CNBC reported that the deal was worth $192 million over four years.

Other categories that are estimated to pay the NBA more than $100 million annually include banking, telecommunications and merchandise, according to IEG. Include companies that spend at least $50 million Anheuser-Busch, PepsiAnd the AT&T.

Among the four major sports leagues, the NBA ranks third in sponsorship revenue. The The NFL is No. 1 with nearly $2 billion in sponsorship deals for the 2021 season, according to IEG. And in March, CNBC reported MLB grossed $1.7 billion In sponsorship shows last season. Guaranteed NHL $676 million in bail money For the 2020-21 season.

The IEG predictions come as the NBA Finals are scheduled to begin 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 hold the arena naming rights for 20 years 700 million dollars With the platform. Warriors signed a $10 million global rights agreement With FTX, the exchange of cryptocurrency derivatives. The company has also secured the arena naming rights for the Miami Heat.

Jason Tatum #0 of the Boston Celtics leads 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 | Getty Images

NBA jersey ads are growing

Another category that helps with the NBA bottom line: ads on players’ shirts.

The NBA is expected to bring in more than $200 million this season from jersey patch deals. It includes Brooklyn Nets insurance $30 million a season from brokerage trading platform Webull in September 2021. The deal led the NBA at the time, but the Warriors snagged the number one spot earlier this month when they renewed their deal with the Japanese e-commerce company Rakuten.

The terms of that deal have not been publicly disclosed. But league sources told CNBC that Rakuten will pay the Warriors North $40 million a year. That’s up from the $20 million of the previous deal.

The people spoke to CNBC on condition of anonymity because they are restricted from publicly discussing team agreements.

Jersey sponsorship has expanded into the professional leagues over the past year. The NHL, for example, has added patches to uniforms and helmets during the pandemic. and the MLB Team Uniform Corrections In the new working agreement with the players in March of this year. The NFL does not allow patches on uniforms.

Increased revenue from advertising on uniforms and other sponsorship deals could help the NBA reach its peak It is expected to reach $10 billion In total revenue this season. The NBA commissioner, Adam Silver, said total revenue in the 2020-21 season was down about 35% from the previous year after the pandemic reduced the season to just 72 games. Revenue in the 2019-20 season, which was also partially affected by the pandemic, was $8.3 billion, down from $8.8 billion in 2018-2019.

League sponsorship revenue is expected to continue to grow.

The league data rights are dealt with its headquarters in Switzerland Sportradar – Reported to be worth $1 billion – Starts at 2023-24 season. The NBA TV deal also expires after the 2024-25 season, and sports executives expect it to exceed its current $24 billion value, or roughly $2 billion a 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 deals, companies also commit to buying ads for NBA national games.

For 2021-22 regular season games, national ad spend on NBA games was $470.7 million, according to media tracking company iSpot.