Cryptocurrency exchange OKX is doubling down on Manchester City. On Sunday, the company announced it had reached an agreement to expand its existing partnership and become the club’s official training kit partner for the 2022-23 season. The deal will also see select Manchester City players star in crypto education content produced by OKX.
Financial terms were not disclosed, but a source tells Forbes that the expanded agreement will net the reigning Premier League champions more than $20 million this season. Manchester City previously named OKX as its official cryptocurrency partner in March as part of a multimillion-dollar arrangement. Forbes estimates the club is worth $4.25 billion, the sixth-most valuable in the world.
Crypto money has poured into sports over the past few years as the industry continues to develop a mainstream presence. FTX, for instance, signed up several top athlete endorsers, including Tampa Bay Buccaneers quarterback Tom Brady, Golden State Warriors star point guard Steph Curry and Los Angeles Angels two-way phenom Shohei Ohtani. In February, crosstown rival Manchester United added blockchain company Tezos as a sponsor, in a deal worth $27 million annually, according to The Athletic. Last year, French club Paris Saint-Germain added fan token provider Socios.com and trading platform Crypto.com as team sponsors. FIFA also announced in March that Crypto.com would be the “exclusive cryptocurrency trading platform sponsor of Qatar 2022.” A Nielsen report from earlier this year estimates that crypto spending in sports will rise to $5 billion by 2026.
But the crypto downturn of late, which sent the value of Bitcoin plunging below $20,000 in June, has cast doubt on the future of the space. In June, Coinbase, BlockFi, Crypto.com and Gemini announced layoffs, resulting in the loss of nearly 1,700 jobs. BlockFi, which Pitchbook last valued at $4.8 billion, is reportedly finalizing a deal to be sold to FTX for $240 million, according to Yahoo Finance. Coinbase stock is down roughly 76% from the start of 2022. On the sports front, FTX pumped the brakes on a potential jersey patch sponsorship with the Los Angeles Angels, according to the New York Post. The Washington Wizards also had a deal with an unnamed crypto company fall through.
“The market has definitely slowed,” says veteran sports business consultant and Columbia lecturer Joe Favorito. He adds: “You haven’t seen a patch come off an umpire’s uniform or the name removed from an arena. But the ancillary spending has definitely been cut back, whether that’s major ads and things like the NBA Finals.”
Meanwhile, OKX is pushing ahead with expansion plans, despite the downturn. In addition to its Manchester City partnership, the company’s director of financial markets told CoinDesk recently that it plans to grow its workforce by 30% with a goal of reaching a staff of 5,000. Fidelity Digital Assets and Binance have also announced similar intentions in the past few months. “OKX’s investments in our partners and our team are market agnostic because our principals and beliefs haven’t changed,” says OKX chief marketing officer Haider Rafique. “We are intentional about selecting partners who reflect this focus, which means we didn’t spend the bull run making sports deals at an unsustainable rate.”
Founded in 2017 by embattled crypto entrepreneur Star Xu, OKX operates in more than 180 markets internationally and has over 20 million users. Based in the Republic of Seychelles, it is the second-largest crypto exchange by derivatives and spot trading volume. In 2021, OKX says it processed more than 25 billion trades with volumes exceeding $21 trillion.