September 15, 2021: -On Tuesday, New York-based Drone Racing League landed its most significant sponsorship agreement to date with cryptocurrency platform Algorand, the company said.
According to PitchBook, DRL is a first-person-view racing league where drone pilots race devices through neon-lit courses and compete for prize money. The company was established in 2017 and, at present, is valued at $200 million.
The terms of the agreement with Algorand are not public, but people knowing the deal told CNBC it’s a five-year pact worth $100 million. The financial services company Allianz, based in Germany, held the title rights since DRL started and will remain a league partner. Excel Sports Management then negotiates the deal with Algorand.
Jacobson described the Generation Z audience as digital-savvy, early adopters “caring about an Apple iPhone launch as they do about sports and entertainment,” she added.
“When you look across what’s happening with crypto and blockchain, you have to ensure that you’re targeting the right audience,” she added.
Based in Boston, Algorand has a blockchain, or digital ledger, traded on the cryptocurrency exchange under the ticker symbol ALGO. As crypto keeps evolving in the financial sector, companies are positioned to attract more digital consumers, which uses sports sponsorships to create awareness.
This year, crypto companies took over sports name rights assets in the National Basketball Association, Major League Baseball, and one firm hit a $100 million deal with Liberty Media-owned Formula 1.
A former NBA executive named Jacobson said sports help newer companies with brand awareness but then said that the crypto firms will still need to educate younger audiences about the space and to use engaging platforms to drive their message. DRL says it has reached almost 75 million fans all over the world.
“You need to build in the right programming so that it’s not just a logo slap,” Jacobson said. “The crypto community, they are too smart – they see through just a jersey patch or signage. They want to know how are they involved and how is this going to change my sports experience?'”
DRL begins its sixth season on September 29. The league has media rights deals with NBCUniversal and to stream the deal with Twitter. Other sponsorships also include agreements with DraftKings, T-Mobile, Bodyarmor, the U.S. Air Force. DRL helps the Air Force with the recruitment and training of future drone drivers.
Drones used in racing events are designed and built by DRL, who build models for each race. The drones are worth around $2,000 and can travel up to 90 miles per hour.