\n<\/p>\n
Yet the hype belies a more complicated relationship. Unlike the National Basketball Association, the National Football League, the country\u2019s most popular sports league, has essentially prohibited its teams from using <\/b>crypto. It\u2019s a microcosm of the broader cultural battle between those touting the currency as the shiny future and others warning of its dangers.<\/p>\n<\/div>\n \u201cThe NFL and NBA strategies could not be more different,\u201d said Peter Laatz, global managing director of the sponsorship consultancy and intelligence firm IEG.<\/a> \u201cThe NBA is seeing the windfall and going for it. The NFL is zigging instead of zagging.\u201d<\/p>\n<\/div>\n Story continues below advertisement<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n A sophisticated chain-letter scheme to its detractors, cryptocurrency has inspired legions of supporters who have plowed money in and talked up the currency on social media throughout its roller-coaster market ride. <\/a> (The paper value of all crypto held worldwide is estimated at<\/a> about $2 trillion.)<\/p>\n<\/div>\n Sports and crypto offer an especially neat convergence, between the primarily young men on the field and the primarily young men<\/a> playing the crypto game. The goal is for the first group to goose the numbers of the second \u2014 convincing them that, despite its limited utility,<\/a> crypto is a worthy social cause and a life-changing investment.<\/p>\n<\/div>\n But for sports entertainment kingpins, crypto presents a tricky dilemma. As cryptocurrencies have thrown off tons of cash, some of it has fluttered into the open arms of sports executives, who welcome it. Yet the headlines often come with a negative tint. New York Times columnist and economist Paul Krugman warned<\/a> last month about crypto\u2019s parallels to the subprime mortgage crisis. This week, the FBI arrested a New York couple for allegedly conspiring to launder billions in crypto.<\/a><\/p>\n<\/div>\n Story continues below advertisement<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n That can scare the large corporate entities of professional sports, particularly the NFL, whose love of fresh revenue sources is matched only by its fear of public relations disasters.<\/p>\n<\/div>\n The money factor is why AEG, the entertainment company that owns Staples Center in Los Angeles, <\/b>in the fall took $700 million<\/a> from little-known Singapore-based Crypto.com to place the center under its banner for the next 20 years. The Miami Heat made a similar move<\/a> with its $135 million, 19-year deal with FTX earlier in 2021.<\/p>\n<\/div>\n Story continues below advertisement<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n The fear of a public relations disaster is why the NFL has done almost none of that. Open your crypto wallet app to buy a pretzel at an NFL game and you might have the salt thrown back in your face.<\/p>\n<\/div>\n In September, a memo revealed<\/a> by the Athletic showed the league\u2019s restrictive attitude toward crypto, which relies on a secure and decentralized digital ledger known as a blockchain.<\/p>\n<\/div>\n \u201cClubs are prohibited from selling, or otherwise allowing within club controlled media, advertisements for specific cryptocurrencies, initial coin offerings, other cryptocurrency sales or any other media category as it relates to blockchain, digital asset or as blockchain company, except as outlined in this policy,\u201d it said.<\/p>\n<\/div>\n Story continues below advertisement<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n The NFL has made some forays into NFTs<\/a>, or non-fungible tokens, the digitally watermarked tools that are crypto\u2019s less controversial cousin, signing up for a partnership<\/a> with Ticketmaster for NFTs of Super Bowl tickets and an NFT video highlight program<\/a> with Dapper Labs, one of the leaders in the space. And of course the Super Bowl is taking place at SoFi Stadium, named for the digitally minded financial firm.<\/p>\n<\/div>\n But sponsorships from crypto exchanges remain off-limits, and the idea of the NFL creating a cryptocurrency, which some enthusiasts have advocated,<\/a> is the stuff of fantasy.<\/p>\n<\/div>\n Even the Super Bowl commercials going for as much as $7 million for 30 seconds <\/a>\u2014 which the league authorizes \u2014 include only exchanges such as FTX and not currencies themselves.<\/p>\n<\/div>\n Story continues below advertisement<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n \u201cAs a rule the NFL has always been much more conservative in how it embraces change,\u201d said Neal Pilson, the former head of CBS Sports who now runs a sports consultancy. \u201cIts players are more conservative, its owners are more conservative, its fans are more conservative.\u201d<\/p>\n<\/div>\n The NFL has formed an internal working group to study the regulatory, brand and other consequences of partnering with crypto companies but has set no timetable for when its rules could be revised.<\/p>\n<\/div>\n Renie Anderson, the NFL\u2019s chief revenue officer, said the league is moving slowly by design.<\/p>\n<\/div>\n \u201cWe don\u2019t want to put everything and the kitchen sink into this,\u201d she said by phone from the site of Super Bowl events in Los Angeles. \u201cWe don\u2019t know where a lot of this is going, so what we\u2019re trying to do is testing and learning so we can understand.\u201d<\/p>\n<\/div>\n Story continues below advertisement<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n She cited regulatory and market forces that are still coming into focus. (The Treasury Department and other federal agencies have been ramping up<\/a> their efforts to create a regulatory framework for crypto, but there remains a degree of murkiness around what the future limits might be.)<\/p>\n<\/div>\n The NFL, Anderson said, would rather act after there\u2019s clarity. \u201cIt\u2019s hard to unwind something like a naming rights deal,\u201d she said, \u201cand I\u2019d rather not have to undo opportunities two years later because there are rules against advertising or marketing certain things.\u201d<\/p>\n<\/div>\n NBA executives, however, say they see a major opportunity right now.<\/p>\n<\/div>\n \u201cThe world is heading in this direction \u2014 NFTs and cryptocurrency are here to stay,\u201d said Brandon Schneider, the Warriors\u2019 president and chief operating officer. The club, along with star Stephen Curry, has inaugurated a number of NFT programs and also features FTX prominently at the Chase Center, its home court in San Francisco, and in video streams.<\/p>\n<\/div>\n Story continues below advertisement<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n \u201cThere are certain peripheral Warriors fans that are not very into something like NFTs where we could use them to bring them closer to us,\u201d Schneider said. \u201cBut it also goes the other way \u2014 a lot of people who are big Warriors fans are not into NFTs or crypto, and they see us do it and say: \u2018You know what? This is my entry point.’ Introducing phenomena like NFTs and crypto to fans we think is pretty cool.\u201d<\/p>\n<\/div>\n The stakes for the NBA could be high. Darren Rovell, a veteran sports business analyst for the Action Network, <\/a>says that while he understands the appeal, teams could be left holding the PR bag if crypto values plummet.<\/p>\n<\/div>\n \u201cYou\u2019re associating your brand with a lot of things people don\u2019t understand,\u201d he said, noting in-arena promotions touting products such as a crypto credit card. \u201cThis isn\u2019t Papa John\u2019s or AT&T.\u201d<\/p>\n<\/div>\n Story continues below advertisement<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n Laatz, the consultant, noted that if cryptocurrency values collapse, \u201cteams could be seen as guys that can\u2019t get out of their own way. And the people in the business office will have to go sell sponsorships all over again, which won\u2019t bring in as many dollars. No one wants to buy roads that have already been driven on.\u201d<\/p>\n<\/div>\n Those with long memories recall the mess that ensued when hot start-ups such as Pets.com flooded the Super Bowl in 2000 \u2014 and went under shortly after. Twenty years ago this spring, Enron Field in Houston had to be hastily renamed less than two years into a 30-year naming rights deal because of the disgraced energy company\u2019s mushrooming scandal<\/a>. The Astros sought refuge in orange juice.<\/a><\/p>\n<\/div>\n To naysayers, the cratering of NBA Top Shot last summer \u2014 the NFT collection at one point lost<\/a> more than three-quarters of its value, leaving collectors in the lurch \u2014 is a cautionary tale. The collapse<\/a> of two prominent European soccer clubs\u2019 deals with crypto companies adds fuel to their fire. (Barcelona, in Spain\u2019s La Liga, canceled a sponsorship agreement after the arrest of a crypto partner\u2019s executive, and Manchester City, in the English Premier League, suspended a deal because of questions about the sponsor\u2019s legitimacy.)<\/p>\n<\/div>\n Schneider, though, said he doesn\u2019t see the downside. He noted that NFTs, for instance, are like baseball cards, which can also rise and fall in value and aren\u2019t primarily bought for investment purposes <\/b>anyway.<\/p>\n<\/div>\n \u201cWe don\u2019t really view this as a huge risk,\u201d he said.<\/p>\n<\/div>\n Even less cutting-edge franchises may find themselves eventually swept up. Crypto companies, awash in cash, can greatly outbid traditional marketing partners. And players have been talking up coins in locker rooms and media appearances \u2014 crypto has become to 2020s athlete culture what restaurant openings were in an earlier era.<\/p>\n<\/div>\n \u201cGiven enough time, just about everybody in sports comes around when there\u2019s money to be made,\u201d Pilson said. He noted the dynamic around gambling, which the NFL was slow to adopt after a Supreme Court legalization ruling but now embraces<\/a>.<\/p>\n<\/div>\n Still, even if the NFL jumps in, it may not have the transformative power some crypto-evangelists hope.<\/p>\n<\/div>\n \u201cA lot of the public interest in cryptocurrency comes from the volatility \u2014 it\u2019s got a big entertainment component more than anything else,\u201d said David Yermack, a professor of finance and business transformation at New York University\u2019s Stern School of Business and an expert on cryptocurrency.<\/p>\n<\/div>\n \u201cBut crypto isn\u2019t going to overtake the economy, no matter how much attention it gets, and it\u2019s not going to sop off savings in a major way,\u201d he said. \u201cThere just aren\u2019t enough people to do the mining and not enough energy as currently configured for any of that.\u201d<\/p>\n<\/div>\n He anticipates that, in a few years, more-successful crypto companies will be bought by traditional banks, allowing them to conduct trades more efficiently but not overhauling the financial system.<\/p>\n<\/div>\n That less-than-meets-the-eye message is underscored by some player salary information.<\/p>\n<\/div>\n Beckham has been among those announcing <\/a>news of this kind with much fanfare. But the reality is that no NFL player is getting paid directly in crypto; the league doesn\u2019t allow it. (It would, among other things, pose salary cap concerns.) Instead, the players are converting their post-tax income into cryptocurrency the way any citizen can.<\/p>\n<\/div>\n This has not always proved the wisest course. Rovell conducted<\/a> an analysis of what that means for Beckham, whose one-year base salary with the Rams was $750,000. Given the recent drops in bitcoin, he calculated, Beckham\u2019s take-home salary for the season, after state and local taxes and bitcoin\u2019s decline, was $35,000.<\/p>\n<\/div>\n<\/div>\n