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Liverpool Echo

Sport

Dave Powell

Chelsea have encountered £20m problem Liverpool shouldn't ignore

Liverpool Chelsea WhaleFin Crypto Jurgen Klopp Expedia Jamie Carragher Luis Diaz World Cup Amber Group

When Liverpool went on what was described as a "fishing exercise" earlier this year to try and find out the strength of the sponsorship market, they engaged with a number of firms from a variety of different industries.

With their front of shirt sponsorship deal with long-standing partner Standard Chartered approaching the final stretch of its most recent deal, and with the club keen to find out just what such a prime sponsorship space would fetch in the post-COVID market, Liverpool spoke with firms from the media, travel and tourism, financial and electrical goods sectors before eventually extending their deal with Standard Chartered for a further four years at a value understood to be worth more than £50m per season.

But also part of those conversations were firms from the cryptocurrency sectors, the club having engaged with a couple of firms during their search. The talks never amounted to anything and Liverpool went in another direction, but it was hard to ignore an industry that at the time, post pandemic, was flush with fresh capital and willing to spend big money to gain brand recognition.

In the US and Europe there was a crypto boom when it came to sponsorship, with shirt deals and stadium and arena naming rights sold for big sums across a wide range of sports. The big money was rolling in at a time when some other, more traditional industries were still having to be cautious over just how they spent their marketing budget after the financially bruising time of the previous two years.

But what goes up pretty much has to come down and crypto's rise has turned into a fall in recent times, with part of the collateral damage being sports sponsorships.

The collapse of crypto firm FTX last month, a company that had multiple sports sponsorship deals in place including the naming rights to the NBA team Miami Heat's home arena, set off a domino effect in the industry which has continued to impact sport and led to the latest sponsorship impact, Chelsea's deal with sleeve partner WhaleFin.

According to reports by Bloomberg, WhaleFin, part of the wider Amber Group, are to end their £20m per year agreement with Chelsea just seven months into the deal, as part of a major cost-cutting plan that also includes the shedding of 40 per cent of the workforce. The issues of the Amber Group can be traced back to the collapse of FTX while the length of the deal between WhaleFin and Chelsea was not specified.

Liverpool do have some partnerships in place with the blockchain industry, most notably their link-up with Sorare, a sports fantasy trading card game. They also had an unsuccessful tilt at the NFT market earlier this year when they partnered with London auction house Sotheby's on their 'LFC Heroes' NFT launch. That launch saw just five per cent of the available minted NFT's sold, the final sum from sales a little over £1m.

They have, though, steered clear thus far on their major partnerships being linked to the industry, something that does keep them shielded to the current state of the crypto market and gives them some food for thought when considering their own sleeve sponsor options from next season.

Liverpool are presently looking at their sleeve partner options for next year, the current partner being travel giant Expedia who inked a deal for £10m per year back in 2020. Expedia may yet extend their partnership with the Reds, but with the market for sleeve partners already having risen in value since the deal with Expedia was struck, with Manchester United and Chelsea both having signed deals for double the value of Liverpool's, there will be an increased sum to arrive from it.

But failure of WhaleFin, who also have a five-year deal in place as main sponsors of Atletico Madrid, and Chelsea's deal may pull back some of the potential that was there previously, with the crypto industry having been helping to prop up the values of sponsorships having often been the most willing spenders over the past two years.

Speaking to the Athletic in July, Liverpool CEO Billy Hogan said: "Crypto itself is a pretty broad brush.

"There are lots of different elements within the industry. It’s still a nascent industry which is going through some difficult times currently.

"I would never say never in terms of us partnering with an organisation that’s involved in crypto but I think there are areas where we probably wouldn’t partner in and others where we possibly would.

"Ultimately, from our perspective, and we’re just talking about Liverpool Football Club at this point, it’s all about what’s the right decision for us as an organisation — where’s the opportunity for the club to benefit and supporters to benefit? If the right partner was found within that industry, then I think we’d look at it, for sure."

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