In this photo illustration, a Coinbase logo is displayed on a smartphone with the NBA logo in the background.
Thiago Prudencio | Soap Images | Light Rocket | Getty Images
Cryptocurrency companies have helped propel the NBA’s 2021-22 season to a record $1.6 billion in sponsorship revenue, according to estimates from sports partnership consultancy IEG.
That’s a 13 percent increase from the 2020-21 season’s $1.4 billion. During the 2018-19 season, the National Basketball Association received $1.2 billion in sponsorship funding. Sponsorship deals can include deals for arena naming rights, as well as deals for companies to put their names or logos on players’ jerseys.
“The surge in sponsorship in the cryptocurrency category is something we’ve never seen before,” said Peter Laatz, IEG’s global managing director.
Crypto partners are now the NBA’s most lucrative sponsorship category, second only to the tech category. The NBA’s crypto deals this season include an alliance agreement with crypto trading platform Coinbase. The deal is worth $192 million over four years, CNBC reported.
Other categories estimated to pay the NBA more than $100 million a year include banking, telecommunications and merchandise, according to the IEG. Companies spending at least $50 million include Anheuser-Busch, Pepsi and AT&T.
Among the four major sports leagues, the NBA ranks third in sponsorship revenue. The NFL is No. 1 with nearly $2 billion in sponsorship deals for the 2021 season, according to IEG. In March, CNBC reported that MLB received $1.7 billion in sponsorships last season. The NHL has $676 million in sponsorship funding for the 2020-21 season.
The IEG prediction comes as the NBA Finals is scheduled to begin Thursday, when the Golden State Warriors host the Boston Celtics in Game 1 at the Chase Center.
On the team side, the Los Angeles Lakers agreed to a $700 million 20-year arena naming rights contract with platform Crypto.com. The Warriors have signed a $10 million global rights deal with crypto derivatives exchange FTX. The company also acquired the naming rights for the Miami Heat’s arena.
Boston Celtics No. 0 Jayson Tatum makes a layup against the Golden State Warriors on March 16, 2022 at the Chase Center in San Francisco, California.
Jed Jacobson | National Basketball Association | Getty Images
NBA jersey ads grow
Another category that helps NBA monetization: ads on players’ jerseys.
The NBA is expected to make more than $200 million from jersey patch deals this season. That includes the Brooklyn Nets taking $30 million per season from broker-dealer Webull in September 2021. The deal led the NBA at the time, but the Warriors moved past the top spot when they renewed their deal with Japanese e-commerce company Rakuten earlier this month.
Terms of the deal were not disclosed publicly. But league sources told CNBC that Rakuten will pay the Warriors $40 million a year. This is an increase from the previous deal’s $20 million.
The people spoke to CNBC on condition of anonymity because they are restricted from discussing the team agreement publicly.
Last year, jersey sponsorship expanded in the professional leagues. For example, the NHL added patches to uniforms and helmets during the pandemic. In March, Major League Baseball approved team uniform patches in a new labor agreement with players. The NFL does not allow patches on uniforms.
Revenue growth from jersey ads and other sponsorship deals could help the NBA reach its projected $10 billion total this season. NBA Commissioner Adam Silver said total revenue for the 2020-21 season was down about 35% from the previous year after the pandemic cut the season to just 72 games. Revenue for the 2019-20 season, also partially impacted by the pandemic, was $8.3 billion, down from $8.8 billion in 2018-19.
The league’s sponsorship revenue is expected to keep growing.
The league’s data rights deal with Switzerland-based Sportradar — reportedly worth $1 billion — begins with the 2023-24 season. The NBA’s TV contract also expires after the 2024-25 season, which sports executives expect will exceed its current value of $24 billion, or about $2 billion per season. The NBA also has a merchandise deal with e-commerce giant Fanatics and a deal with Dapper Labs, creators of NBA Top Shot NFTs.
In the league deal, the company also committed to buying ads for national NBA games.
For the 2021-22 regular season, national ad spending on NBA games reached $470.7 million, according to media tracking firm iSpot.
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