The National Football League will now allow clubs to partner with blockchain companies to secure sponsorships. According to a CNBC article, they will still be prohibited from advertising certain cryptocurrencies and fan tokens. This overturns the NFL’s previous decision to prohibit teams from accepting bitcoin sponsorships.
The NFL claims in an internal email obtained by CNBC that it will allow “promotional ties without accepting excessive regulator or brand risk,” but not stadium signage. “Clubs will continue to be barred from directly promoting cryptocurrency,” it adds. Sponsorships between teams and blockchain firms are limited to three years due to “flexibility,” according to Joe Ruggiero, the NFL’s head of consumer products.
Long-term agreements, such as Crypto.com’s $700 million 20-year pact with the Los Angeles Staples Center, which is now known as the Crypto.com Arena, will be avoided. The league is also considering selling its blockchain rights to a specific company, he informed the newspaper.
While the rule amendment allows teams to promote NFTs and the firms that support them, it prohibits the use of official logos and other insignia in any of the advertisements. It also prohibits teams from “participating in product licencing or sponsorship arrangements for NFTs or NFT enterprises.” However, logos and direct sponsorships will be permitted provided they are used “in connection with League-level NFT collaborations.” Last year, the NFL teamed with Dapper Labs, an NFT firm, to create an entire market of NFTs.
It’s logical that the NFL is hesitant to support certain cryptocurrencies and fan tokens. The Arsenal FC soccer team was prohibited from promoting its own fan token by the UK’s advertising regulator in December for allegedly deceiving fans about the hazards involved with cryptocurrencies. Not to mention that earlier this month, the CEO of the prominent Socios exchange — where the majority of these fan tokens are held — was accused of rigging the value of the crypto utilised on the platform. “Just like other currencies and cryptocurrencies, any change in the price of CHZ is primarily determined by prevailing market conditions,” says Socios.com CEO Alexandre Dreyfus.
Because CHZ has such a large market capitalization, any incentive system for eligible personnel has a minor impact on the stock’s price. “In this changing regulatory environment, it is critical that we proceed with caution when considering prospective commercial prospects utilising blockchain technologies, and conduct due analysis on all potential partners and their business models”, the memo continued.
The NFL will meet with team owners to consider the proposed changes to the blockchain rules. However, when it comes to experimenting with NFTs and cryptocurrencies, the NFL hasn’t exactly been cautious. Last year, the league included commemorative NFTs with certain of its games’ tickets, and it did so again for Super Bowl LVI. It also collaborated with Panini, a trading card business, to create the league’s inaugural trading card packs.