At the peak of the dot-com bubble in 1999, commercial internet provider PSINet signed a twenty-year, $105 million deal to acquire the naming rights for Baltimore’s new football stadium. But just three years later, as the bubble burst and the company slid into bankruptcy, PSINet’s neon-purple logo was hauled down from the stadium’s facade and the former internet darling became a poster child for the mania of the dot-com era. 

Twenty-three years later, workers scraped FTX’s lettering off of the Miami Heat’s arena as customers, investors, and regulators picked up the pieces of another burst bubble. The crypto giant, just a year after inking a 19-year, $135 million naming rights agreement with the Heat and kicking off a massive marketing binge within sports, had dramatically and publicly collapsed. This implosion wiped out livelihoods, jeopardized the Heat’s brand and the brands of FTX’s countless other partners, and reset how sports engage with financial services. 

The correlation between major stadium sponsorship deals and corporate failures, dubbed the “stadium curse”, is practically a meme at this point. But money is and always will be intertwined with sports. The sources of the money - whether it be internet providers, fintech startups, or beer companies - may shift over time as fads come and go, but companies will continue to see sports as a valuable marketing channel. For some, like JP Morgan and AT&T, investments in sports make a ton of sense: they have a sustainable business and a large footprint that merit significant spending on sports marketing. For others, like PSINet and FTX, little rationale exists and self-delusion and greed take over. The crypto collapse is just a natural purging of this recklessness and desperation. There are flashes in the pan like FTX in fintech as in every industry, but the underlying drivers pulling sports and financial services together remain powerful.

The convergence of sports and financial services 

Until relatively recently, the ties between the two sectors were nearly non-existent, confined to the sponsorship of little leagues and other local organizations. With narrow marketing channels, heavy regulation around the size and geographic footprint of institutions, and limited competition, banks long relied on entrenched relationships within local communities to grow their customer base. 

By the 1980s, everything changed. Sweeping deregulation, including the lifting of interstate banking restrictions, triggered a still-ongoing wave of consolidation and geographic expansion among banks. While close to 15,000 commercial banks operated in the US in 1980, that number fell sharply to nearly 8,000 in 2000 and just 4,000 today. In parallel, non-bank financial institutions like Visa and new financial technologies emerged as both competition and service providers to banks. The result was a more concentrated but more competitive banking industry with a handful of firms - JP Morgan, Bank of America, etc. - that now had the appetite and ability to deploy big marketing budgets. 

At the same time, sports exploded in popularity. The expansion of TV and media coverage, cultural shifts in attitudes around disposable income, and the emergence of superstars like Joe Montana vaulted the vertical into legitimacy. Notions of amateurism gave way to an obsession over professionalism, carving out a massive business opportunity. In 1968, commercial time in the Super Bowl sold for $150,000 per minute. By 1977 it would rise to $250,000, and by 1985, to a staggering $1 million. 

It was off to the races for sports marketing.