The Washington PostDemocracy Dies in Darkness

The NFL on display this Super Bowl will seem like a crypto-happy league. It’s anything but.

Unlike the NBA, pro football has held back on the new-era currency. How soon will that change?

SoFi Stadium in Inglewood, Calif., site of Super Bowl LVI. (Rob Carr/Getty Images)

When 100 million Americans tune in to the Super Bowl on Sunday, they’re likely to get the impression that cryptocurrency is a fresh NFL star to rival Joe Burrow. At least three commercials will promote the monetary form, while one of Sunday’s best-known players — the Rams’ Odell Beckham Jr. — has said he takes his salary in it. And though Tom Brady may be gone from the game, he hovers over it, hawking crypto exchange FTX.

Yet the hype belies a more complicated relationship. Unlike the National Basketball Association, the National Football League, the country’s most popular sports league, has essentially prohibited its teams from using crypto. It’s a microcosm of the broader cultural battle between those touting the currency as the shiny future and others warning of its dangers.

“The NFL and NBA strategies could not be more different,” said Peter Laatz, global managing director of the sponsorship consultancy and intelligence firm IEG. “The NBA is seeing the windfall and going for it. The NFL is zigging instead of zagging.”

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. (The paper value of all crypto held worldwide is estimated at about $2 trillion.)

Sports and crypto offer an especially neat convergence, between the primarily young men on the field and the primarily young men playing the crypto game. The goal is for the first group to goose the numbers of the second — convincing them that, despite its limited utility, crypto is a worthy social cause and a life-changing investment.

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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 last month about crypto’s parallels to the subprime mortgage crisis. This week, the FBI arrested a New York couple for allegedly conspiring to launder billions in crypto.

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.

The money factor is why AEG, the entertainment company that owns Staples Center in Los Angeles, in the fall took $700 million 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 with its $135 million, 19-year deal with FTX earlier in 2021.

The Sacramento Kings and Dallas Mavericks accept the currency at their concessions. The Golden State Warriors, a crypto leader, have a significant sponsorship deal with FTX, and the NBA itself has made crypto exchange Coinbase its official platform, with various promotions.

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.

In September, a memo revealed by the Athletic showed the league’s restrictive attitude toward crypto, which relies on a secure and decentralized digital ledger known as a blockchain.

“Clubs 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,” it said.

The NFL has made some forays into NFTs, or non-fungible tokens, the digitally watermarked tools that are crypto’s less controversial cousin, signing up for a partnership with Ticketmaster for NFTs of Super Bowl tickets and an NFT video highlight program 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.

But sponsorships from crypto exchanges remain off-limits, and the idea of the NFL creating a cryptocurrency, which some enthusiasts have advocated, is the stuff of fantasy.

Even the Super Bowl commercials going for as much as $7 million for 30 seconds — which the league authorizes — include only exchanges such as FTX and not currencies themselves.

“As a rule the NFL has always been much more conservative in how it embraces change,” said Neal Pilson, the former head of CBS Sports who now runs a sports consultancy. “Its players are more conservative, its owners are more conservative, its fans are more conservative.”

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.

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Renie Anderson, the NFL’s chief revenue officer, said the league is moving slowly by design.

“We don’t want to put everything and the kitchen sink into this,” she said by phone from the site of Super Bowl events in Los Angeles. “We don’t know where a lot of this is going, so what we’re trying to do is testing and learning so we can understand.”

She cited regulatory and market forces that are still coming into focus. (The Treasury Department and other federal agencies have been ramping up their efforts to create a regulatory framework for crypto, but there remains a degree of murkiness around what the future limits might be.)

The NFL, Anderson said, would rather act after there’s clarity. “It’s hard to unwind something like a naming rights deal,” she said, “and I’d rather not have to undo opportunities two years later because there are rules against advertising or marketing certain things.”

NBA executives, however, say they see a major opportunity right now.

“The world is heading in this direction — NFTs and cryptocurrency are here to stay,” said Brandon Schneider, the Warriors’ 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.

“There are certain peripheral Warriors fans that are very into something like NFTs where we could use them to bring them closer to us,” Schneider said. “But it also goes the other way — a lot of people who are big Warriors fans are not into NFTs or crypto, and they see us do it and say: ‘You know what? This is my entry point.' Introducing phenomena like NFTs and crypto to fans we think is pretty cool.”

The stakes for the NBA could be high. Darren Rovell, a veteran sports business analyst for the Action Network, says that while he understands the appeal, teams could be left holding the PR bag if crypto values plummet.

“You’re associating your brand with a lot of things people don’t understand,” he said, noting in-arena promotions touting products such as a crypto credit card. “This isn’t Papa John’s or AT&T.”

Laatz, the consultant, noted that if cryptocurrency values collapse, “teams could be seen as guys that can’t get out of their own way. And the people in the business office will have to go sell sponsorships all over again, which won’t bring in as many dollars. No one wants to buy roads that have already been driven on.”

Those with long memories recall the mess that ensued when hot start-ups such as Pets.com flooded the Super Bowl in 2000 — 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’s mushrooming scandal. The Astros sought refuge in orange juice.

To naysayers, the cratering of NBA Top Shot last summer — the NFT collection at one point lost more than three-quarters of its value, leaving collectors in the lurch — is a cautionary tale. The collapse of two prominent European soccer clubs’ deals with crypto companies adds fuel to their fire. (Barcelona, in Spain’s La Liga, canceled a sponsorship agreement after the arrest of a crypto partner’s executive, and Manchester City, in the English Premier League, suspended a deal because of questions about the sponsor’s legitimacy.)

Schneider, though, said he doesn’t see the downside. He noted that NFTs, for instance, are like baseball cards, which can also rise and fall in value and aren’t primarily bought for investment purposes anyway.

“We don’t really view this as a huge risk,” he said.

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 — crypto has become to 2020s athlete culture what restaurant openings were in an earlier era.

“Given enough time, just about everybody in sports comes around when there’s money to be made,” Pilson said. He noted the dynamic around gambling, which the NFL was slow to adopt after a Supreme Court legalization ruling but now embraces.

Still, even if the NFL jumps in, it may not have the transformative power some crypto-evangelists hope.

“A lot of the public interest in cryptocurrency comes from the volatility — it’s got a big entertainment component more than anything else,” said David Yermack, a professor of finance and business transformation at New York University’s Stern School of Business and an expert on cryptocurrency.

“But crypto isn’t going to overtake the economy, no matter how much attention it gets, and it’s not going to sop off savings in a major way,” he said. “There just aren’t enough people to do the mining and not enough energy as currently configured for any of that.”

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.

That less-than-meets-the-eye message is underscored by some player salary information.

Beckham has been among those announcing news of this kind with much fanfare. But the reality is that no NFL player is getting paid directly in crypto; the league doesn’t 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.

This has not always proved the wisest course. Rovell conducted 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’s take-home salary for the season, after state and local taxes and bitcoin’s decline, was $35,000.

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