FTX has massive sponsorship deals with sports leagues and star athletes like Tom Brady. Here’s what experts say could happen after the crypto exchange imploses.

Screenshot 2021 06 04 at 12.57.45

Sam Bankman-Fried, founder and CEO of crypto exchange FTX.Official FTX/YouTube

  • Sam Bankman-Fried’s FTX has invested millions of dollars in naming rights, partnerships and sponsorships in the sports world.

  • With FTX’s survival in question, massive deals with Tom Brady, the Miami Heat and MLB are in jeopardy.

  • Experts say Miami’s FTX Arena may soon get a name change, but some celebrities may struggle to get paid.

Sam Bankman-Fried’s FTX crypto exchange faces an uncertain future.

Rival platform Binance initially agreed to bail out FTX as the company faced a severe liquidity crunch after being hit by $6 billion in withdrawals in just 72 hours, but Binance announced on Wednesday that the deal fell through.

FTX was once worth $32 billion as cryptocurrency prices surged in 2020 and 2021. Meanwhile, Bankman-Fried has poured millions of dollars into numerous high-profile sponsorships in the sports world, including including partnerships in baseball, basketball, soccer – and even Formula One.

Now that it seems increasingly likely that the company will not survive its current situation, questions arise about the future of these agreements.

Here are some of FTX’s most prominent sports offerings and what experts say they could become:

One of FTX’s most visible partnerships is with the Miami Heat. Its home ground was renamed FTX Arena in June 2021.

FTX Arena in Miami

FTX Arena in MiamiThe next Miami

FTX had signed a 19-year contract with the Miami basketball arena for $135 million. It was to be called FTX Arena until 2040.

It’s not the first time a stadium has been named after a bankrupt company if FTX doesn’t survive. Minute Maid Park, home of the Houston Astros, was formerly called Enron Field. Enron declared bankruptcy in 2001.

Michael Lewis, a professor of marketing at Emory University’s business school, said the arena would likely be famous if FTX didn’t survive or pay the full rights yet.

“At the end of the day, if the organization is gone, it’s almost guaranteed that if the lawyers were doing their job with minimal skill, suddenly these naming deals would come back and hit the market again,” he said. .

FTX has been the “Official Cryptocurrency Exchange Brand of MLB” since June 2021. All Major League Baseball umpires wear a crest with the FTX logo as part of the agreement.

MLB Referees All Sports FTX Patches

MLB Referees All Sports FTX PatchesNick Cammett/Diamond Images

MLB called FTX the “first ever umpire uniform patch partner” in a press release announcing the deal.

Joe Favorito, a sports management professor at Columbia University, said those patches could wear off.

“If there’s no business, the branding disappears,” he said.

“The biggest concern is that if you’re selling rights and you’re anticipating revenue that hasn’t come in, then you have a problem,” he added.

In December 2021, the Golden State Warriors announced a “first of its kind” cryptocurrency partnership in professional sports, naming FTX its “official cryptocurrency platform and NFT marketplace”.

Golden State Warriors

Golden State WarriorsGMS

FTX reportedly paid $10 million for a deal with the Warriors, though it’s possible the crypto exchange didn’t pay in full up front, Favorito said.

“If you have money owed to you on the books of a business and the business goes bankrupt, you have to go to bankruptcy court,” he said.

“Can you even come back? That’s the risk you run,” he added.

FTX had several celebrity endorsers, mostly from the sports world. Football star Tom Brady has appeared in advertisements for the platform.

Tampa Bay Buccaneers quarterback Tom Brady leaves the field during the regular season game between the New Orleans Saints and the Tampa Bay Buccaneers

Tom Brady.Getty/Cliff Welch

Tom Brady had one of the biggest deals with FTX of all his celebrity endorsers. He and his ex-wife Gisele Bündchen weren’t just corporate ambassadors; they were shareholders.

“It’s an incredibly exciting time in the crypto world, and Sam (Bankman-Fried) and the groundbreaking team at FTX continue to open my eyes to the endless possibilities,” Brady said during the announcement. of the partnership.

Brady stands to lose a significant portion of his FTX investment, if not all of it.

Lewis said Brady’s reputation is unlikely to be harmed if FTX folds.

“Brady is close to a bulletproof mark, and I suspect the impact will be relatively small,” he said.

“If the organization goes away, those sponsorship deals tend to go away. The bigger question becomes…can they get back what’s owed to them if a company goes bankrupt?” Lewis added.

Stephen Curry has also appeared in FTX commercials and signed a deal with the company. Here are some other celebrities who have had deals with FTX:

Steph Curry in FTX Commercial

Steph Curry in FTX CommercialFTX

Naomi Osaka

Naomi Osaka wears an FTX patch at the US Open

Naomi Osaka wears an FTX patch at the US OpenMatthew Stockman/Getty Images

Gisele Bundchen

Gisele Bundchen for FTX

Gisele Bundchen for FTXFTX

Kevin O’Leary

Sam Bankman-Fried sits at a long white table having dinner with Anthony Scaramucci and Shark Tank investor Kevin O'Leary.

Sam Bankman-Fried has dinner with Kevin O’Leary at the SALT NY conferenceSALT NY

Shaquille O’Neal

Shaq is featured on the FTX website

Shaq is featured on the FTX websiteFTX

FTX didn’t stop with the pros, however. The crypto company has even invested in college sports. UC Berkeley signed a $17.5 million deal with FTX to sponsor its athletic department — and agreed to be paid entirely in crypto.

FTX Field at California Memorial Stadium

FTX Field at California Memorial StadiumCalifornia Golden Bears

It is unclear if FTX paid UC Berkeley in full for the rights. The value of the most important cryptocurrencies has depreciated significantly since the announcement of the 10-year deal last summer.

As a result of this agreement, the school’s California Memorial Stadium is renamed FTX Field.

“The big challenge is when you’re trying to find new income and working for a team or a league. The question is, do you take the risk for a business that could be high risk, high reward, and take the risk that it can happen, or go back and say maybe we’re not going to take the risk and we’re going to be a lot more conservative,” Favorito said.

FTX even invested in a Formula 1 racing team called Mercedes-AMG Petronas

Mercedes-AMG Petronas Formula 1 team car

Mercedes-AMG Petronas Formula One Team car with FTX logoJeffrey Greenberg/Universal Pictures Group

Lewis said Bankman-Fried’s decision to bring FTX into the sports world made sense.

“Sport is the gold standard in terms of sponsorships… There is a body of shared history and shared knowledge and it unifies people across races, religions and political affiliations. While the America has become polarized and fragmented, sport is probably the last thing left that has that kind of unifying force,” he said.

FTX has also invested in esports events like Riot Games’ League of Legends North American Championship Series and Comcast-owned esports tournament organizer Nerd Street Games.

Read the original article on Business Insider

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