Has the naming rights curse finally hit crypto?

While it would be unfair to say that every corporate stadium naming rights partnership precedes an unfortunate event — after all, there are more than 75 professional league stadiums in America — a mythology has been established around such deals and the hubris it takes to see them through.

Even if talk of a naming rights curse is overstating things a little, it has to be said that some of the most high-profile naming deals in recent years have centered around particularly disastrous episodes. Think MCI Center in D.C., Enron Field in Houston, and the Wachovia Center in Philadelphia.

If nothing else, these deals can seemingly provide a handy litmus test before major market downturns.

History rhyming

On April 7, 2000, just one year before journalists and investors began to question its financial statements, Enron purchased 30 years of naming rights for the newly-built Astros stadium in Houston. The price for the rights was $100 million, paid out at just over $3 million a year.

By the end of 2002, Enron was forced by a court order to sell those naming rights back to the Astros for $2.1 million. The Astros were quickly able to find a new buyer, to which the rights still belong, Minute Maid — though Minute Maid was merged into the Coca-Cola Company by 2003.

In what probably felt like déjà vu, just last year, Crypto Dot Com, a Singapore-based cryptocurrency exchange, made the decision to buy two decades of naming rights to the formerly named STAPLES Center in Los Angeles.

This decision came at an incredible expense for the start-up: over $700 million, or nearly twice what it cost to construct the STAPLES Center in the first place. The sum was also almost four times what it cost Staples to purchase the original naming rights.

On top of the more than $700 million spent on the arena naming rights, the exchange also inked an “eight-figure deal” to put a patch on the uniforms of the Philadelphia 76ers for six years.

So, what has more than three-quarters of a billion dollars spent on basketball marketing alone gotten the exchange? Not much, from what any outside observer can tell. Crypto Dot Com’s native cryptocurrency, Cronos, is down almost 90% year-over-year. Meanwhile, it’s been widely reported that the company is facing steep layoffs in the face of an industry-wide downturn.

FTX heating up

The other big swinger in sports marketing over the past couple of years has been FTX, a Bahamas-based crypto exchange with American Sam Bankman-Fried at the helm. FTX purchased naming rights for the former American Airlines Arena in Miami in early 2021, a 19-year deal sealed for $135 million. The Miami Heat now officially play in the FTX Arena.

But this wasn’t the only sports marketing that the exchange took part in. It also sponsored an esports team for over $200 million and has seen its logo plastered on every umpire in Major League Baseball. The price of that deal is undisclosed.

This suggests that FTX spent a half billion dollars or more on sports marketing alone — and odds are they weren’t the most advantageous dollars spent. This year, FTX gave up on an attempted deal with the Los Angeles Angels of Anaheim as crypto winter took its toll.

Meanwhile, for the first time since FTX was founded, people seem to be asking whether or not the exchange and its sister trading firm — Alameda Research — are insolvent.

Best for last

The most egregious example of choosing to spend money on sports marketing as opposed to a functional business has to go to the team formerly in charge of the algorithmic stablecoin pair TERRA/LUNA.

A deal was penned this year with the Washington Nationals for about $40 million, granting naming rights for an exclusive luxury venue for high-end clients, along with seats behind home plate being plastered with ‘TERRA’ for at least one MLB season — possibly many more.

Only months later, the stablecoin pair collapsed into oblivion. Meanwhile, everyone watching a Nationals game has been reminded of the poor deal for the entire season — with empty seats glaring back at viewers during every at-bat.

Immersed in the naming rights curse

As the broader economy begins to embrace a recession, cryptocurrency is maintaining lows not seen in years. Is the curse of the stadium naming rights real? Are there more major cryptocurrency bankruptcies in the not-so-distant future? Only time will tell — Crypto Dot Com and FTX hope to buck the trend.

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