Inter Miami CF is searching for sponsorship money in calmer seas.
The team, including captain Lionel Messi, will be kicking off the 2024 season with their shirts sporting the logo of Royal Caribbean Cruises instead of the crypto investment firm XBTO, according to a statement. Financial details weren’t disclosed.
Since the FTX implosion in 2022 rocked the industry, sports sponsorships have been dwindling for crypto firms. XBTO had signed a multiyear partnership with the team in 2021 that’s now ending just three years later. XBTO didn’t immediately respond to a request for comment from Fortune.
Meanwhile, the cruise industry, with its admittedly less controversial branding, has been booming. Thanks to post-pandemic travel rebounds last year, cruise lines such as Royal Caribbean (112%), Carnival (130%), and Norwegian (64%) all saw major gains in their stock prices before retreating in early 2024.
The Miami-based soccer team’s deal with Royal Caribbean highlights the sporting world’s wider pivot away from crypto money and back toward safer, more traditional industries.
Boom and bust
Like beer in the late 1990s, airlines in the early 2000s, and then telecom firms in the mid-2000s, crypto and sports, at least a few years ago, seemed like a perfect marriage.
For crypto firms, sports deals promised large audiences, plus the brand association gave credibility to a new sector many consumers likely perceived as risky, said Francis Dumais, cofounder of the sponsorship marketing agency Elevent.
“It was a way to project a lower sense of risk,” Dumais told Fortune. And in return, the industry could offer lucrative deals. “It’s not so much that crypto made sense, as much as it was the new gold rush that sport properties could not ignore.”
Conrad Wiacek, head of sport analysis and consulting at GlobalData, added via email: “Sports fans are typically male, and the appeal of crypto to this group meant that sports partnerships were a great way to generate interest.”
In 2021, Crypto.com signed a 20-year, $700 million deal for the naming rights to the Los Angeles arena that’s home to the Lakers, Kings, and Sparks, formerly known as the Staples Center. Meanwhile, Coinbase signed a wide-ranging four-year, $192 million deal with the NBA; and NFL quarterback Tom Brady agreed to be paid $55 million by FTX for just 20 hours of his time yearly.
Miami became home to FTX Arena, home of the NBA’s Heat. The facility was inaugurated in 1999 as American Airlines Arena, but in 2021, the county ended its deal with the airline, exchanging it for an agreement with FTX that paid significantly more than the $2.1 million annually the airline had agreed to pay. The arena was renamed as part of a 19-year, $135 million deal.
But following FTX’s collapse, a federal bankruptcy judge agreed to end the agreement between the exchange and Miami-Dade County, according to a court filing. The arena was last year renamed the Kaseya Center, after the IT and security software company Kaseya purchased the rights.
The FTX arena deal had been part of a local rebranding effort after, in January 2021, Miami mayor Francis Suarez took to Twitter to declare his city America’s crypto capital. “The City of Miami believes in #Bitcoin,” he tweeted, “and I’m working day and night to turn Miami into a hub for crypto innovation.”
Further disentanglements
Last January, Scuderia Ferrari, the racing division of luxury carmaker Ferrari, departed its multiyear partnership deals with Velas Blockchain and chip manufacturing giant Snapdragon, resulting in a $55 million loss for the Italian team. The Ferrari-Velas partnership from 2021—set at $30 million a year—was aimed at increasing fan engagement through NFTs.
In November, Mercedes lost $15 million after suspending its partnership with FTX as the exchange filed for Chapter 11 bankruptcy. Formula One team Red Bull Racing also ended its partnership with the blockchain platform Tezos Foundation early and suffered similar losses, as Tezos reportedly decided not to renew its agreement, citing strategy misalignment.
Underpinning the shift away from crypto sponsorships, in addition to the bankruptcies and failed firms, is the industry’s penchant for splashy headlines, among them FTX CEO and founder Sam Bankman-Fried’s fraud conviction and Binance CEO and cofounder Changpeng Zhao’s plea deal. Moreover, lawsuits against exchanges Binance and Coinbase, accused of operating as unregistered brokerages, are currently being litigated.
This story was originally featured on Fortune.com