Crypto Combat: Why crypto companies are pouring millions into UFC sponsorship

On July, 7, 2021, the Ultimate Fighting Championship (UFC) announced an unprecedented long-term partnership with, one of the fastest growing crypto exchanges in…

By: Karim Zidan | 1 year ago
Crypto Combat: Why crypto companies are pouring millions into UFC sponsorship
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On July, 7, 2021, the Ultimate Fighting Championship (UFC) announced an unprecedented long-term partnership with, one of the fastest growing crypto exchanges in the world. The deal elevated to the UFC’s first-ever “global official fight kit partner,” which allowed the crypto platform to emblazon their branding on UFC fight kits worn by fighters and their corner people during competition.

Worth $175 million over 10 years, the deal also led to the creation of a new sponsorship category for the world’s leading mixed martial arts promotion, with receiving the designation of the UFC’s first “official cryptocurrency platform partner.”

“This is a partnership between two companies that are the best at what they do,” UFC President Dana White said in the official press release. “No company has done more to grow the popularity of combat sports than UFC, and now we’re one of the biggest sports brands on the planet. We can help reach more people around the world through the strength of our brand.”

The announcement marked the UFC’s latest foray into the ever-changing world of cryptocurrencies, which are digital currencies or binary data that can operate as mediums of exchange. In April 2021, the UFC reportedly filed several new trademark applications indicating plans to launch a UFC-branded cryptocurrency, as well as an app for users to manage non-fungible tokens (NFTs)—effectively digital collectibles—and other digital assets. The organization also signed a licensing agreement with Dapper Labs, a blockchain game company best known as the creators of CryptoKitties and the company behind NBA Top Shots NFT marketplace.

The following month, the organization partnered with Chiliz, a leading digital currency and blockchain provider for sports and entertainment industries, and announced plans to launch a $UFC Fan Token fan engagement & rewards platform The UFC would be the latest of approximately 30 major sports properties to partner with Chiliz, including European football giants FC Barcelona, Paris Saint-Germain, AC Milan, and Manchester City.

The UFC’s interest in the crypto space is unsurprising given its success across other sports leagues. The NBA’s Top Shot NFT marketplace, where basketball fans can purchase video highlights (just the clip, not the copyright), had nearly half a million collectors who made more than 4m transactions as of April 2021. Some NFTs sold for nearly $400,000.

Beyond its potential for quick profit, the UFC likely views the crypto space as an opportunity to reap large sponsorship fees from crypto platforms with extremely deep pockets. However, the UFC’s pivot to crypto, along with various other sports leagues’ fervent pursuit of crypto deals raises concerns about the added cost to sports fans, the tokenization of sports through digital currencies, and rising scrutiny due to a lack of regulation.’s $1.4 billion sports strategy

Over the past year, Singapore-based has spent more than $1.4 billion in nearly a dozen sports sponsorship deals across Formula One, hockey, basketball, football, MMA and esports.

Most recently, the crypto exchange spent $700 million to rename the Staples Center—home of the LA Lakers—to arena, marking the most a corporate sponsor has agreed to pay on a stadium naming rights. And while the price might have been steep, was buying far more than just the naming rights.

By attaching their name to an arena that is home to the Lakers and the Clippers, is investing in a long-term marketing strategy aimed at creating brand legitimacy that overshadows’s place in a relatively young, controversial, and largely unlicensed industry. The crypto platform will now receive global recognition and its name will be attached with some of the most recognizable franchises in the NBA.

Photo by FREDERIC J. BROWN/AFP via Getty Images and other cryptocurrency exchanges and blockchain businesses are also pouring millions into sponsorships and licensing deals in an effort to acquire new customers. According to recent studies, sports fans and bettors are more likely than the broader population to be familiar with cryptocurrencies such as Bitcoin and Ethereum. As a result, cryptocurrencies quickly emerged as a prominent sponsorship category in sports.

Crypto companies have partnered with individual teams such as NHL’s Montreal Canadiens (, Paris Saint-Germain ( and NBA’s Miami Heat (FTX). These exchanges have also been endorsed by high profile athletes. FTX—a two-year-old exchange based in The Bahamas—announced a $20 million ad campaign starring football legend Tom Brady. The company later brought in Stephen Curry as well.

Interestingly, studies also showed that fans of niche sports were even more familiar with cryptocurrencies than fans of the major leagues. This included tennis fans, esports fans, MMA and golf. This explains’s deals with the UFC, Formula One, and other relatively niche sports organizations.

The strategy appears to be working. Binance, the world’s largest crypto exchange by volume, is reportedly struggling to maintain its spot as king of the hill. Binance reportedly dropped 45% in volume while competitors Coinbase, and FTX have seen significant gains. And while the increase in brokerage volumes was not necessarily a direct result of the sports deals (Binance is facing regulatory concerns in several countries), it could certainly have played a role in the recent change.

While the rise of crypto platforms and new sponsorship opportunities signals the beginning of a new era in sports, it remains unclear whether the influx of sponsorship dollars will benefit the vast majority of athletes and fans, and whether the influx of crypto companies will lead to shady activity and a dystopian sports future dominated by digital assets and the tokenization of fandom.

Easy Prey

Sports fans have long been easy targets for companies attempting to push addictive activity online. According to Bloomberg, approximately 40% of the English Premier League’s jersey sponsors are gambling companies. And as gambling sponsorships increased, so did the revenue they reaped from new signups encouraged to try online sports betting.

Much of the same principles apply to cryptocurrencies, which sports fans seemed to embrace with a similar appetite and vigor as they do with gambling.

Beyond sponsorship deals, crypto companies such as are partnering with major teams from across all sports to create “fan tokens” which are then marketed as a way for clubs to increase online engagement with fans. Sports teams would release official fan tokens, which would then be purchased by fans using cryptocurrencies (in’s case, it is through the digital currency Chiliz, which is also developed by Fans who purchase these tokens are given exclusive content such as PSG giving token holders the right to vote on the message placed on the captain’s armband and to choose an inspirational message for the team ahead of the match. It is worth noting that when Lionel Messi signed with PSG earlier this past summer, he was given a “welcome package” of PSG fan tokens worth a reported 25-30 million euros.

Photo by Mattia Ozbot/Inter via Getty Images

Much like digital currencies, fan tokens can be traded at crypto exchanges and face similar volatile price action. PSG’s fan token, which has a market cap of roughly $52 million, soared over 130% in just five days amid speculation over Messi’s arrival to an all-time high of over $60 in August 2021. However, it is currently worth $16.86, a significant drop from it’s all-time high.

Such volatile changes in price means that sophisticated traders may be able to easily take advantage of fans who have no experience trading cryptocurrencies and digital assets.

It is also likely that clubs and sports leagues view fan tokens as an opportunity for increased profits without having to make any physical changes or sell physical merchandise. It also turns fan loyalty into a paid privilege available to an exclusive few willing to invest in it. It is possible that fan tokens could be required for fans to attend events, purchase merchandise, or to even watch exclusive content. In short: fandom may no longer be free in this crypto-dominated future.

The influx of crypto platforms in the sports landscape has also led to an increase in questionable operators attempting to work with major clubs. Manchester City partnered with mysterious crypto-start-up company 3Key Technologies to promote decentralized finance trading analysis as part of the club’ commercial expansion. However, Man City suspended the partnership a week later when it became clear that the company had no digital footprint, online presence or a registered office.

“Prompted by the club’s interactions with 3Key Technologies in recent days, Manchester City is now conducting further enquiries regarding 3Key Technologies and the partnership has been suspended pending satisfactory resolution to all of those inquiries,” a club spokesperson said at the time.

Barcelona FC also canceled a two-week-old partnership with NFT marketplace Ownix, following the arrest of Beitar Jerusalem football club owner Moshe Hogeg, who worked as a consultant on the project. Hogeg was detained on allegations of fraud and sexual misconduct, and continues to deny any wrongdoing.

In the UFC’s case, the organization has managed to avoid any overtly concerning crypto partnerships. However, the organization’s skewed revenue split with athletes ensures that profit from crypto sponsorships are unlikely to trickle down to the fighters.

Gary A. Vasquez-USA TODAY Sports

Unlike the vast majority of sports leagues and organizations, where athletes receive anywhere between 47-50% of the sport’s revenue, the UFC has historically paid out between 16-19% of revenues to its fighters. In 2019, the organization reported $900m in revenue, but only 16% was paid out to the UFC’s approximately 600 fighters.

The UFC’s stranglehold over its fighters led to a half-dozen former UFC fighters filing a $5bn antitrust lawsuit against UFC’s parent company, Zuffa LLC, in December 2014. The lawsuit charges Zuffa LLC with illegally acquiring and maintaining a monopoly over the MMA industry. It claims that the UFC used predatory practices and ran an illegal scheme to eliminate competition, which resulted in fighters being paid “a fraction of what they would earn in a competitive marketplace.”

For example, fighters will not get a direct cut of the UFC’s deal with However, they will be able to broker individual deals with the cryptocurrency company and be used as paid brand ambassadors. Interestingly, when the UFC announced an expanded partnership with that included an exclusive line of NFTs, it revealed that fighters will get 50% of the revenue from NFT sales.

Despite these small concessions, the UFC’s exposure to the current crypto boom will primarily benefit the organization’s bottom line. UFC fighters are unlikely to make much more money—at least not as much as they could through collective bargaining—while fans are likely to lose money by “investing” in fan tokens and watered-down “digital collectibles.”

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About the author
Karim Zidan
Karim Zidan

Karim Zidan is a investigative reporter and feature writer focusing on the intersection of sports and politics. He has written for BloodyElbow since 2014 and has served as an associate editor since 2016. He also writes for The New York Times and The Guardian. Karim has been invited to speak about his work at numerous universities, including Princeton, and was a panelist at the South by Southwest (SXSW) film festival and the Oslo Freedom Forum. He also participated in the United Nations counter-terrorism conference in 2021. His reporting on Ramzan Kadyrov’s involvement in MMA, much of which was done for Bloody Elbow, has led to numerous award nominations, and was the basis of an award-winning HBO Real Sports documentary.

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