After the crypto boom: what fight sports learned from the exchange money

In July 2021 the UFC announced Crypto.com as a partner in a deal reported at about $175m over ten years. Four months later the arena in downtown Los Angeles took the exchange's name in a naming-rights agreement reported at about $700m over 20 years. For rights holders in fight sports and beyond, it was the moment a new category of sponsor arrived with more money than almost anyone else at the table. Twelve months after that, in November 2022, FTX, one of the most visible sponsors of the whole wave, filed for bankruptcy. The boom and the bust were close enough together that a single contract could live through both. That is why the episode is worth studying now, with some distance, for what it changed in how sports businesses sign their partners.

The wave

The 2021–22 crypto sponsorship surge was not confined to combat sports, and it is easier to understand when we see its breadth. Exchanges and trading apps signed shirt deals, sleeve patches, arena names, league-wide "official exchange" designations and celebrity ambassador contracts. FTX put its name on a Formula 1 team's cars and on Major League Baseball umpires' uniforms, and on the arena in Miami. Crypto.com, besides the UFC and Los Angeles, signed with Formula 1 and became a sponsor of the 2022 FIFA World Cup. The February 2022 Super Bowl was nicknamed the "Crypto Bowl" for the number of exchange advertisements it carried.

The logic from the sponsor's side was straightforward. Exchanges were competing for retail customers in a market where switching costs are low, and sport offered the fastest route to mainstream recognition. They had cash after a strong market run, and they wanted legitimacy as much as reach: a logo next to a long-established league or a famous building signalled permanence.

From the rights holder's side, the logic was even simpler. Crypto was a new category. Sponsorship sales work by category exclusivity — one official bank, one official beer, one official airline — so a new category is close to pure incremental revenue. It does not cannibalise any existing partner.

A new sponsor category is the rarest thing in sports business: money that displaces nobody.

Why fight sports fit the pitch

Combat sports were a natural target. The UFC's audience skews young and male, digitally fluent and internationally spread, which is close to a description of the early crypto customer. Fight nights produce short, intense bursts of attention, ideal for brand moments: the octagon canvas, the walkout, the replay graphic. The Crypto.com deal with the UFC was notable for the way it built on that, with the partner linked to fan-facing elements such as fan-voted bonus awards rather than only logo placement.

Boxing had a more fragmented experience, which reflects its structure. With no single league selling inventory, deals tended to be fight-by-fight or fighter-by-fighter. That cut both ways. It limited the size of any single crypto deal, but it also meant boxing was less exposed when the market turned. Our piece on boxing and MMA business models explains why a centralised promotion can sell sponsorship at a scale a fragmented sport cannot.

Fight sports also had an earlier, cautionary episode. In 2018 the US Securities and Exchange Commission charged Floyd Mayweather Jr over his promotion of initial coin offerings — token sales used to raise money for crypto projects — for failing to disclose that he had been paid to promote them. He settled without admitting or denying the findings. It was an early sign that regulators would treat crypto promotion as a securities question, not just a marketing one.

November 2022

The market turned through 2022. The collapse of the Terra stablecoin project in May was followed by the failure of lenders such as Celsius and Voyager over the summer. Then, in November 2022, FTX filed for Chapter 11 bankruptcy protection in the United States after a run on the exchange.

For rights holders, the FTX collapse was a lesson in counterparty risk — the risk that the other side of a contract cannot pay. A sponsorship is a long-dated promise of future payments. When the sponsor fails, the rights holder becomes one more creditor in a bankruptcy, with a damaged brand association on its building or kit.

The Miami arena is the clearest case. Miami-Dade County, which owns the building, moved to end the FTX naming agreement after the bankruptcy, and the arena has since taken another sponsor's name. Formula 1's Mercedes team removed FTX branding from its cars. Other partners quietly dropped exchange logos from their inventory. Deals with companies that did not fail were also reshaped in places, as some sponsors cut marketing budgets when trading volumes and prices fell.

The lesson most rights holders drew was not that crypto money was bad money. It was that they had not priced the risk properly. A ten- or twenty-year deal with a company only a few years old, in a sector without settled regulation, had been treated like a deal with a long-established bank.

Fan tokens, briefly explained

Fan tokens were the other half of the boom, and they deserve their own explanation because they are often confused with sponsorship.

A fan token is a digital token, usually issued on a blockchain platform in partnership with a club or team, that gives holders access to certain perks. The best-known platform is Socios.com, which runs on the Chiliz blockchain and partnered with football clubs including Juventus, Paris Saint-Germain and Barcelona.

The main advertised perk is voting. Holders can vote in polls the club chooses to run, such as the design of a piece of merchandise, a goal-celebration song or a message on a dressing-room wall. Other perks include competitions, rewards and access to experiences. The votes are on matters the club chooses; they do not confer ownership or governance rights.

For the rights holder, fan tokens could generate revenue from the initial token sale and from a share of trading activity, alongside any fixed fee from the platform. For the fan, the token is a tradeable asset whose price is volatile. The value of a fan token can rise and fall sharply with crypto markets, with team performance and with trading activity on the platform, entirely independently of whether the voting perks are worth anything. In the UK, the advertising regulator ruled against some club promotions of fan tokens for failing to make the risks clear.

That is the reputational issue for any fight-sports organisation considering a token. A sponsor's logo on a canvas is one thing. Encouraging your own fans to buy a volatile asset carrying your name is a different level of responsibility, and fans who lose money tend to blame the brand they trusted, not the platform behind it.

The new due diligence

After 2022, rights holders and their agencies tightened the questions they ask before signing a crypto or technology partner. In our reading of the market, a sensible checklist now covers the following.

Two of these deserve a word of explanation. Payment in tokens rather than fiat transfers market risk to the rights holder: a fee worth a fixed sum on signing might be worth much less, or more, by the time it is spent. Most finance directors now insist on fiat. Termination clauses matter because a naming-rights deal without a clean exit can leave a failed company's name on a building while lawyers argue.

Regulation has also moved. The European Union's Markets in Crypto-Assets Regulation, known as MiCA, was adopted in 2023 and created a licensing framework for crypto service providers across the bloc. For a rights holder, a partner's regulatory status is now something that can be checked rather than assumed. That does not remove the risk, but it makes the diligence more concrete than it was in 2021.

What changed, and what did not

The crypto sponsorship wave left a lasting mark on how fight sports sell themselves. It proved that a new category could pay at the top of the market. It also showed that the size of a headline number tells you little about the quality of the counterparty behind it, and that long contracts with young companies need protections that older categories rarely needed.

None of this is an argument for or against crypto as a sponsor category. Some of the 2021 deals survived the downturn; others did not. The difference is that rights holders now negotiate as if the sponsor might fail, which is how they should have negotiated all along. For more on how sponsorship money fits alongside the other revenue in a fight, see our explainer on how a fight purse works.