Amidst a market downturn, Crypto.com scales back some sports partnership agreements: Report
October 9, 2022 10:43 PM
According to reports, the cryptocurrency exchange has reduced the scope of sponsorship agreements signed with sports organizations such as the Angel City Football Club, the 2022 FIFA World Cup, and Twitch Rivals.
As a result of layoffs and the market decline, cryptocurrency exchange Crypto.com has reportedly scaled back on many of its sponsorship deals with sports organizations.
In a report published on Oct. 6 by Ad Age tech reporter Asa Hiken, Crypto.com was said to have reduced the scope of sponsorship agreements signed with major sports organizations such as the Los Angeles Angel City Football Club, the 2022 FIFA World Cup in Qatar, and the esports tournament host Twitch Rivals. Hiken said the crypto exchange was considering such a move after the market crash in May, citing anonymous current and former employees.
A cryptocurrency company that advertised heavily when the number was up has now experienced the other shoe dropping, according to Hiken. Having seen that figure drop, the company is now forced to face the consequences of past, pricey choices.
Angel City's attorneys are said to have claimed the cryptocurrency exchange initially agreed to the December 2021 deal but then withheld payments and ultimately reneged. Moreover, the company reportedly settled on plans to dissolve its partnership with Twitch Rivals, with both parties agreeing to end the deal by the end of 2022. The number of hospitality packages Crypto.com planned to issue as part of the FIFA deal may have been halved, according to allegations made by a former employee.
In the past year, Crypto.com has signed several high-profile marketing deals, such as a $700 million agreement to rename the Staples Center in Los Angeles as the Crypto.com Arena and the hiring of actor Matt Damon to star in its "Fortune Favors the Brave" ad campaign. According to reports, work on the multimillion dollar upgrade at the cryptocurrency exchange has continued.
A half-billion dollar sponsorship deal with the Union of European Football Associations Champions League was reportedly abandoned by Crypto.com in September. According to a recent report, the exchange's five-year deal with the Australian Football League and Formula 1 could be among the other major partnerships that could be affected.
Even though Crypto.com CEO Kris Marszalek stated in June that the exchange planned to downsize by 5% of its employees, the report suggested that the percentage of staff cuts may have been much higher, with approximately 30% to 40% leaving the firm from June to August, many of which were due to layoffs. Since the beginning of July, Crypto.com has had the approval of the financial regulatory authorities in Italy, Cyprus, France, and the United Kingdom to provide its services to locals in those countries.