'The Showdown' golfers will be paid in crypto. In sports, they won't be the first

‘The Showdown’ golfers will be paid in crypto. In sports, they won’t be the first

Posted by Admin December 17, 2024 Golf

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The annual golf exhibition now known as “The Showdown” will take place in Las Vegas on Tuesday evening, with a PGA Tour team of Rory McIlroy and Scottie Scheffler going head-to-head with the LIV Golf team of Bryson DeChambeau and Brooks Koepka.

A whopping $10 million in prize money will be up for grabs, according a report last month by Front Office Sports. And, in a bit of a twist, it will be distributed to the participating golfers in the form of cryptocurrency.

Title sponsor Crypto.com said in a news release that the event will be “the first ever major golf tournament with a multimillion dollar purse to be paid in CRO cryptocurrency.” (CRO stands for Cronos, which is the primary cryptocurrency of Crypto.com, a Singapore-based crypto exchange.)

But “The Showdown” is hardly the cryptocurrency industry’s first foray into the world of sports. And the golfers will not be the first professional athletes to receive some or all of their income in crypto.

In 2019, NFL lineman said ‘pay me in bitcoin’

Nearly five years ago, former NFL offensive lineman Russell Okung posted a four-word statement to X, formerly known as Twitter: “Pay me in bitcoin.”

About 18 months later, he effectively made that a reality by converting half of his $13 million base salary for the 2020 NFL season into bitcoin, a digital currency that is bought and sold online using a type of encryption technology known as a blockchain.

Okung was not technically paid in bitcoin. The Carolina Panthers paid him in U.S. dollars, which he then converted using a crypto product from Zap called “Strike.” But his investment in the volatile digital currency has paid off, as the value of a single bitcoin has increased from around $27,000 in 2020 to more than $100,000 as of Monday.

“I’m enjoying the victory lap,” he told Sportico last month. “It’s been incredible timing and an incredible story.”

Okung has since announced the creation of Bitball, a sports venture that will pay its athletes in bitcoin.

Other athletes who have reportedly converted salaries to crypto

New York Jets quarterback Aaron Rodgers, recently-waived NFL wide receiver Odell Beckham Jr. and Dallas Mavericks guard Klay Thompson are among the other athletes who publicly said they would be converting part of their salaries to cryptocurrency over the past few years, in some cases as part of an apparent sponsorship agreement.

Jacksonville Jaguars quarterback Trevor Lawrence was thought to have invested his rookie signing bonus into crypto, as part of an endorsement deal with cryptocurrency exchange FTX. Though he has since rejected that claim and FTX has since gone bankrupt.

Some of the athletes who converted salary money into cryptocurrencies have taken to social media over the past few weeks to celebrate the surging values of their investment. Crypto values have soared since the re-election of Donald Trump, who is a supporter of digital currencies and has spoken about his desire to turn the United States into the “crypto capital of the planet.” Though experts caution that the value of cryptocurrencies can rise and fall more dramatically than other investments.

“It’s important to understand that all cryptocurrencies, including bitcoin, are highly volatile, unregulated and widely misunderstood,” Investopedia editor-in-chief Caleb Silver told USA TODAY last week.

Crypto prize money for athletes

In its news release, Crypto.com described the prize pot for “The Showdown” as being in the millions without describing how the money would be distributed between the winning and losing team or confirming the $10 million total figure reported by Front Office Sports. The company’s media relations department did not immediately reply to a message seeking more information on the prize purse.

DeChambeau, who will be representing the Saudi-funded LIV Golf league, said in the news release that it is “beyond exciting” to be able to compete for “a true first with a cryptocurrency based prize purse.”

This is not the first time that athletes have received prize money in the form of crypto, however. Every player on the two teams that competed in the WNBA’s Commissioner’s Cup last season received $5,000 in cryptocurrency via the event’s sponsor, Coinbase. That prize was in addition to the regular $500,000 prize pool offered by the league.

What’s in it for crypto companies?

Crypto.com’s sponsorship of “The Showdown” is one of its many deals within the world of sports.

In 2021, it purchased the naming rights for the basketball and hockey arena in downtown Los Angeles that was formerly known as the Staples Center. And it has since struck sponsorship arrangements with Formula 1 and the UEFA Champions League, among other deals.

David Carter, a professor of sports business at USC and founder of the Sports Business Group, described the sponsorship investments of cryptocurrency companies like Crypto.com as “a branding land grab” designed to build recognition, particularly among young people.

With “The Showdown,” Crypto.com is essentially taking a two-pronged marketing approach, by sponsoring the event as well as the prize. Carter wrote in an email that this is hardly a new concept, pointing to major auto manufacturers that have sponsored events and given away cars. But he added that it can be effective.

“Whenever a company can have multiple and credible touchpoints with fans, it is to their benefit,” he wrote. “This is especially true given that they hope to convert them to loyal, long-time customers.”

Contributing: Daniel de Visé

Contact Tom Schad at tschad@usatoday.com or on social media @tomschad.bsky.social.