Cryptocurrency and the Washington Nationals: Once Bitten, Twice Shy?

In May 2022, Jennifer Chen, vice president of strategic partnerships for the Washington Nationals, faced a dilemma. Just months before, the Nationals had embarked on a high-profile sponsorship partnership with Terraform Labs, a decentralized autonomous organization that had created two cryptocurrencies, TerraUSD (UST) and Luna. The Nationals had agreed to accept the stablecoin UST as payment and had emblazoned its ballpark with Terraform Labs' logo, even naming its luxury indoor seating space the Terra Club. But now both coins' value was tanking, and Chen had to scramble to figure out what to do now that the team she represented was tied to a company with a failing offering.

Cryptocurrency was a known risk. It was an unpredictable asset for many reasons. Accepting it as payment required businesses to stay on top of fluctuating technology and regulatory policies. Even collateralized cryptocurrency stablecoins backed by "safe assets" were often criticized for a lack of transparency about what exactly those assets were and how safe they could really be. But like a lot of risky investments, it offered potentially very lucrative rewards, especially to sports teams, whose fan profiles often aligned with those of cryptocurrency holders. Many teams other than the Nationals were excited about partnering with cryptocurrency companies—but would the fallout from Terraform Labs' coins change the landscape? And, crucially for Chen, what would the Nationals' relationship with cryptocurrency be going forward?

This case is taught at Darden in the Leadership Residency for Darden Executive MBAs; it would also be suitable in a course on stakeholder engagement strategies or on digital strategies.