New financial technologies are rapidly becoming one of the most involved sectors in sports sponsorships.
The rapid evolution in the financial world is having a major impact on the sporting world, creating a whole stream of business opportunities that did not exist even two years ago. Cryptocurrencies are now a reality and the need to enter the global scene motivates large investments in visibility. The aspiration of brands linked to this type of product is in fact to leave the "niche" of early adopters and various speculators to become an everyday tool.
It is from this perspective that the large movements of capital that are reaching teams, athletes and federations should be assessed. This type of initiative has its epicentre in the United States but is rapidly opening up to the international stage. Crypto.com's massive presence at the latest rounds of the Formula 1 World Championship, following a $100 million deal with Liberty Media, has not gone unnoticed. Formula 1 seems to be the main vector selected by cryptocurrency brands to achieve the desired awareness. The choice appears to be correct, given the media coverage, the possibility of exposure in dozens of countries on five continents, and the average spending level of other backers. We are talking about an average of 87 million TV viewers per race with a theoretical total pool of over 1.5 billion people.
The international economic situation, coupled with sponsorship regulations that severely limit the entry of those sectors historically linked to motorsport, makes the championship an ideal venue for doing business between players with common interests.
With a growth rate of close to 100% per year, the number of people investing in cryptocurrencies could reach 400 million by the end of 2022. This number is likely to increase to millions more potential investors in the NBA, NFL, football leagues and Formula 1.
This season, 8 out of 10 teams can boast themed sponsorships. The value of the partnerships varies, but their increase from 3 in 2021 suggests that the trend is rising exponentially. The inclusion of Miami, a booming cryptocurrency market, on the calendar is an important contribution to the entry of other players into the league.
NFTs and Fan Tokens their role in creating value
In addition to the quest for visibility, one of the opportunities that teams and funders are most interested in is the ability to create blood NFTs and Fan Tokens. These will help increase the popularity, reputation and value of the partnerships as well as reach potential markets not yet involved in the sector.
The business model is basically the one codified by Alexandre Dreyfus through Socios.com. The companies produce exclusive content via their partners' blockchains and keep a percentage of their sales. In return, fans have a more direct relationship with the team/athlete and are involved in decisions and initiatives.
NFTs are part of a collectors' and speculators' perspective, being digital products linked to exclusivity and non-repeatability. The examples and possibilities are essentially linked to the creativity and wishes of the teams: we can find photos, videos, sounds, renders, data, illustrations and mixes of these formats. the price can vary depending on the print run and the type of drop.
Fan tokens, on the other hand, are a 'token' that grants access to a 'higher' sphere where discounts, admissions, concessions and other benefits are available.
Once NFTs and Fan Tokens have been released and purchased, they are traded and bought in a pure market environment. The first release by Aston Martin Cognizant, for example, brought in almost $2 million.
The 2022 panorama in detail
Red Bull signs multi-year $150m deal with cryptocurrency exchange platform Bybit. This includes a series of initiatives aimed not only at creating know-how on the subject, but also at directly involving fans. It also continues the partnership started last year with Tezos for the production of NFT and Fan Tokens.
Alpha Tauri collaborates with Fantoma blockchain platform designed for low-cost instant transactions, which includes a presence on the cars on targeted occasions (not surprisingly Monte Carlo and Abu Dhabi). The driver Pierre Gasly also acts as brand ambassador.
Mercedes renews and expands its presence on the FTXplatform for the exchange of both traditional shares and cryptocurrencies and nft. Precisely the creation of the latter is one of the focal points of the collaboration
The rear wing of theAlfa Romeo features the logo of Flokithe creator of Floki Inu, a meme coin operating on the Ethereum and Binance platforms. The idea of the developers is to expand its community (the Floki Vikings) through a presence in the main sporting fields. In this sense, the presence of Chinese driver Zhou Guanyu in the team represents an opportunity to increase awareness in China.
Binance is the world's first cryptocurrency exchange platform by volume and links its name to the Alpine team. The project involves the creation of a dedicated cryptocurrency, the Alpine F1 Team Fan Token, launched through the Binance Fan Token Launchpad. This will allow users who wish to join the initiative to build a closer relationship with the team and access exclusive opportunities.
Aston Martin signed a multi-year agreement with the brand Crypto.com since last season. The stable used the launch of the 2022 car to release the first set of themed NFTs and Fan Tokens.
The collaboration between the blockchain and McLaren also continues. Tezos and McLaren, which will allow the British manufacturer to create and distribute its own NFTs. The advertising involvement can exploit the team's multiple channels: in addition to Formula 1, the Indycar, Extreme E and the E-sport championship. For the latter, the men from Woking have developed a special dedicated livery in which Tezos itself is the protagonist on the sides. McLaren was also the protagonist of the first collaboration with the aim of creating Fan Tokens last year together with the Turks from Bitci.com.
Ferrari has joined the "chorus" and signed a partnership agreement with the Swiss company Velas Network AG. The plan is for the future development of dedicated NFTs through the proprietary blockchain and a synergy that on a visual level includes not only the logo on the car but the presence as title sponsor of both the Esports team and the official Ferrari Esports Series single-brand.
After the golden age of tobacco and beer, cryptocurrencies and NFTs seem to be the new certainty that can provide sport, especially motorsport, with the capital to look to the future with more optimism. We are at the beginning of one of the entrepreneurial revolutions in this field and only a fraction of the possible developments have been explored at the moment.
In the second part of the article we analyse the spread of digital assets in NASCAR and Indycar, here is the link to the in-depth analysis
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