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MLB’s latest sports venture to distance itself from former sponsor FTX

Topline

Major League Baseball confirmed on Thursday that it has ended its sponsorship with FTX following the cryptocurrency exchange’s “shocking” bankruptcy, the latest ripple effect in the sports industry after the once lucrative sponsor caught fire.

Highlights

FTX became the “Official Cryptocurrency Exchange Brand of MLB” last summer, and MLB umpires wore FTX logo patches on their uniforms from July 2021 to the World Series which ended earlier this month- this.

Rob Manfred, MLB commissioner told reporters On Thursday, FTX is no longer a league sponsor and the refs will no longer adorn its logo, saying “FTX’s development was a bit shocking” and promising the league would “act with caution in the future.”

MLB wasn’t the only sports company bitten by its association with FTX, which last week filed for bankruptcy and ousted its former founder and billionaire CEO Sam Bankman-Fried, as the company invested millions of dollars in new projects. other sports companies.

FTX became the title sponsor of the home arena of the NBA’s Miami Heat in March 2021 in a $135 million agreement, sponsored the University of California, Berkeley football stadium last August for $17.5 million and hit a $210 million naming rights deal with the the most valuable eSports organization in the world TSM last June (all three organizations terminated their agreements with FTX after its bankruptcy).

The trade also has endorsement deals with many of the world’s top athletes, including 2021 American League Most Valuable Player Shohei Ohtani, Baseball Hall of Famer David Ortiz and quarterback of the Tampa Bay Buccaneers Tom Brady, who were all among the dozen famous FTX endorsers named in a proposal class action filed earlier this week seeking damages for their role in promoting FTX.

Key context

Crypto companies have committed more than $3 billion in sponsorship money to the sports industry, GlobalData head of sports analytics Conrad Wiacek wrote in email comments last week, calling the FTX collapse of “seismic moment for the sports sponsorship industry”. Valued at $32 billion in January with backing from major institutional investors, FTX’s sudden collapse came after revelations of unscrupulous practices within the company and Bankman-Fried’s trading firm Alameda Research. The crypto has particularly taken hold among high-profile athletes, with several high-profile players like NFL star Aaron Rodgers taking part of their salaries in bitcoin.

Tangent

Manfred said His “expectation” on Thursday is to reach a collective bargaining agreement with the sport’s minor leaguers before the start of the 2023 season in April. MLB voluntarily recognized the minor league union in September after years of criticism of labor practices and congressional scrutiny.

Further reading

FTX has spent a lot of money on sports sponsorships. What happens now? (New York Times)

Tom and Gisele Together Again as Defendants in FTX Class Action (Forbes)

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