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Why did Crypto.com back out of a $495M Champions League deal?

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Earlier this year, it was reported that Crypto.com was working on a half-billion sponsorship deal with UEFA, and now it looks like the deal has fallen through.

Crypto.com has been the biggest sponsor for various sports events, arenas and leagues. Founded just six years ago, the company has signed deals with some of the biggest names in the global sports industry, including UFC, F1 and the Philadelphia 76ers.

Most notably, the company acquired the rights to the home of the Los Angeles Lakers in a $700 million deal. The arena they play in is now called the Crypto Arena and will be for the next two decades.

When news broke earlier this year that the company was in talks with UEFA to become the primary sponsor of the Champions League, it came as no surprise. But now it seems the deal has fallen through.

How the $495 million deal falls through

According to a report by SportBusiness, the deal between Crypto.com and UEFA has been “terminated by mutual agreement”. It is still unclear why the deal fell through, but speculation is that the current state of the crypto market may have had something to do with it.

The report notes that the price of bitcoin has fallen nearly 50% since mid-June, which may have played a role in the company’s decision to pull out of the deal.

Another reason appears to be a disagreement surrounding Crypto.com’s licensing agreement in Italy, France and the UK.

What is the result of falling through the contract?

If all goes according to plan, the crypto exchange will be promoted during Champions League games for the next five seasons. The deal was supposed to run through 2025, costing just under $100 million per season.

Crypto.com was supposed to replace Gazprom, the Russian-owned energy provider that sponsored the Champions League in the past. The league decided to exclude Gazprom after Russia’s invasion of Ukraine.

Many countries imposed sanctions against Russia, so UEFA decided to find a new sponsor. Gazprom’s contract with UEFA was worth around €50 million per season.

As we mentioned earlier, Crypto.com has sponsored some of the biggest names and events in the sports industry. So far, they have invested more than $1 billion over half of the last decade.

Apart from the NBA and UFC, the organization also has a deal with the AFL (Australian Football League). The five-year deal is worth around $25 million and will see Crypto.com’s branding on 18 clubs in Guernsey.

Moreover, the crypto exchange also entered into a partnership with FIFA in March this year. Their branding will feature prominently during the upcoming World Cup in Qatar.

On the one hand, we have a company that is investing heavily in the sports industry. But on the other hand, we have information that Crypto.com laid off 260 employees in June.

At this point, it is unclear whether the current drop in crypto prices is the reason behind some of the company’s decisions. We will have to wait and see how things develop in the coming months.



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