How do NBA and its stars use cryptocurrency?

As the world's top basketball league, the NBA has embraced the cryptocurrency field ahead of other sports leagues. It is foreseeable that more and more crypto service providers will appear in various sports events around the world.

Recently, the NBA has received a big news. Crypto.com has reached a 20-year agreement with AEG, the owner and operator of the Staples Center in Los Angeles, to officially rename the Staples Center to Crypto.com Arena.

In fact, since the beginning of this year, NBA teams and stars have made continuous progress in cooperation with digital assets and blockchain technology companies.

So far, the NBA has established partnerships with four companies in the cryptocurrency field, including FTX, Coinbasa, Crypto.com and NYDIG.

Star players such as Curry, Durant, and McGrady have successively invested in or issued NFTs, while Wizards player Dinwiddie began accepting Bitcoin as payment for his salary as early as 2017. This year, the cryptocurrency application APP Calaxy, which he co-founded, completed US$7.5 million in financing.

As the world's top basketball league, the NBA has embraced the cryptocurrency field ahead of other sports leagues. It is foreseeable that more and more crypto service providers will appear in various sports events around the world.

Lakers' home stadium renamed Crypto.com Arena

The Staples Center is the official home of the NBA Lakers, Clippers, WNBA Sparks and NHL Kings. This is the first time the venue has changed its name since it opened in 1999, when the U.S. office supplies retailer Staples spent $120 million to acquire the naming rights.

According to the Los Angeles Times, citing sources, the deal for the naming rights for the next 20 years is worth $700 million. At the same time, it is the most expensive naming rights deal in sports history.

"This partnership is about the future," AEG President and CEO Dan Beckerman said in a statement.

Todd Goldstein, Chief Revenue Officer at AEG, said: “This partnership represents the world’s fastest growing cryptocurrency platform and the largest sports and live entertainment company working together to advance the future of sports and live entertainment and the incredible assets that will be built in this space for decades to come.”

According to the announcement, the agreement also makes Crypto.com the “official cryptocurrency platform partner” of the Los Angeles Lakers and Los Angeles Kings.

Crypto.com is a cryptocurrency exchange founded in 2016 and headquartered in Singapore with over 10 million customers.

But what is noteworthy is that the transaction was reportedly paid entirely in cash, not cryptocurrency.

The Staples Center is one of the most iconic sports and entertainment venues in Los Angeles. In addition to being the home of four professional sports teams, it is also the venue for many Grammy Awards ceremonies. However, after the official announcement of the name change on November 17, many fans expressed their regret on social media.

"No one living in this city would call it that. This building will always be known as the Staples Center. O'Neal and Kobe built it." "Bad name, give Staples back to us." Some fans also said bluntly, "Do you think cryptocurrency will still exist in 20 years? This is so cute."

Someone else joked that it was only after reading the reviews that they realized people were so enthusiastic about office supplies.

NBA stars’ journey into cryptocurrency

NBA's application of blockchain technology has also created a collection market that makes fans even crazier.

In July 2019, Dapper Labs announced that it would work with the NBA to launch NBA Top Shot. In the statement at the time, Dapper Labs CEO Roham Gharegozlou said that this was a "revolutionary new experience, where jaw-dropping games and unforgettable moments become collectibles that you can own forever."

NBA Top Shot is a blockchain-based platform that allows fans to buy, sell and trade numbered versions of specific, officially licensed video highlights.

From Durant's three-pointers to James' dunks, this digital transaction that allows fans to purchase NBA players' best shots or game clips has exceeded US$740 million in transaction volume and the number of transactions has reached 480,000 since its launch in October last year.

There is no doubt that this blockchain-based business is very profitable. In addition, NBA Top Shot charges a 5% transaction fee for each transaction on the secondary market, and this 5% is shared by the entire league.

On the other hand, individual players are also spending money to buy unique NFTs. For example, in August this year, Curry, the star of the NBA Warriors, spent $180,000 to buy a boring ape avatar, which caused an uproar on domestic social media at the time.

In October this year, Boardroom, a sports media company founded by superstar Durant and his investment company Thirty Five Ventures, established a two-year partnership with Dapper Labs. It is reported that Durant and Thirty Five Ventures will be responsible for creative development, and Dapper Labs will plan and create NBA Top Shot Moments and video content for Durant.

The latest news is that former NBA Houston Rockets star Tracy McGrady has also joined the NFT ranks. The Tracy McGrady Moment NFT issued by Binance NFT and Arche Network was released on the 19th of this month. In this regard, McGrady said on Weibo: "It is a sacred decision for me to make Tracy McGrady Moments and the highlights of my basketball career into NFTs."

The NBA has fully enjoyed the "digital gold rush" this year. On the one hand, the booming NFT ecosystem has enabled it to earn additional income, and players can also purchase or issue NFTs on their own. On the other hand, the continuous cooperation with crypto companies and acceptance of cryptocurrency sponsorships have also helped the league recover during the epidemic.

In a statement, NBA executive Kerry Tatlock labeled the partnership with Coinbase as a "natural match" for the league's cryptocurrency assets. It can be seen that the NBA has been at the forefront of playing with "blockchain + sports".

Dinwiddie, who plays for the Washington Wizards, is well-known in the crypto space. He joined the circle as early as 2017. He is an investor in multiple related projects and is also starting his own business. Dinwiddie is an investor in NBA Top Shot developer Dapper Labs. The cryptocurrency app Calaxy, which he co-founded, raised $7.5 million this year.

Dinwiddie's enthusiasm for the crypto field is also reflected in his desire to become a sponsor of his team's jersey advertisements. According to reports, Dinwiddie, who just joined the Washington Wizards not long ago, planned to pay a high price to buy the team's jersey advertisements to increase the popularity of the cryptocurrency application APP he launched, but this was rejected by the league.

It is worth noting that when he signed a three-year, $34.4 million contract in 2018, he asked the Nets to pay in the form of Bitcoin, making him the first NBA player to "take the lead."

Four exchanges join the NBA

Crypto.com is not the first cryptocurrency exchange to seek naming rights in the sports field. It is FTX. On April 7 this year, the Miami Heat officially announced that FTX.us will be the exclusive naming rights of its home stadium for the next 19 years. The original American Airlines Arena was renamed FTX Arena.

The 19-year deal was worth $135 million. At the time, Miami Mayor Francis Suarez said FTX’s bid “complemented” the crypto-friendly brand he wanted to create for the city.

The NBA has also gained the favor of Coinbase, the largest cryptocurrency exchange in the United States. In October, the NBA reached its first cryptocurrency sponsorship agreement with Coinbase, which stated that it would become the exclusive cryptocurrency platform partner for the NBA, WNBA, NBA G League, NBA 2K League and the U.S. Men's National Basketball Team.

So far, the NBA has established partnerships with four companies in the cryptocurrency field, including FTX, Coinbasa, Crypto.com and NYDIG. The "big-money" Lakers home naming rights also further reflect that cooperation with the NBA is becoming a "hot commodity" in the eyes of cryptocurrency exchanges.

Gu Yanxi, a senior Bitcoin scholar, analyzed to the reporter of Blockchain Daily that cooperation between the two fields will definitely continue to increase in the future.

In his opinion, the cooperation between sports leagues and crypto companies has a mutual impact. "The sports industry is relatively advanced in the field of Crypto, especially with players asking to be paid in Bitcoin, and more and more sports leagues are accepting sponsorship from crypto companies," he said. "For Crypto service providers, they also hope to promote the application of Crypto through sports."

"So it's not surprising that they would work with the NBA and other sports leagues. Fans are global, and the impact will not be limited to the United States."

Crypto.com’s deal with AEG, for example, allows the platform to be associated with one of the NBA’s top teams, increasing its brand awareness.

However, regarding the news that the Lakers' home stadium will be renamed, Lakers head coach Frank Vogel said: "This is difficult for the fans. I understand their disappointment, but this is the world. The naming rights of the venue have commercial factors, which are not something we can decide."