France Media Agency
November 18, 2022 | 9:14 a.m.
PARIS, France — The collapse of cryptocurrency exchange FTX has sent shockwaves through the sport, which the platform has used extensively to build its brand.
FTX signed a series of sponsorship deals and recruited sports stars to appear in commercials, often airing on sports shows.
Since the announcement of the company’s bankruptcy last week, many sports organizations have been quick to withdraw from partnerships.
The Mercedes Formula 1 team has removed the FTX logos from its Formula 1 cars ahead of the Brazilian Grand Prix last Sunday.
The Miami Heat NBA basketball team dropped its deal with FTX, after signing a $135 million contract for arena naming rights in March 2021.
The FTX Arena, formerly known as Miami Arena and American Airlines Arena, will change its name again. Photos on social media showed that the FTX logo had already been removed.
The debacle also took a legal turn.
On Wednesday, an investor filed a lawsuit in Miami against the company, its former boss Sam Bankman-Fried and several famous sportsmen.
These included basketball player Stephen Curry and his Golden State Warriors team, former NBA star Shaquille O’Neal, tennis player Naomi Osaka and NFL quarterback Tom Brady.
The investor, Edwin Garrison, of Oklahoma, accused the company of “false statements and omissions”.
“Some of the biggest names in sports and entertainment have either invested in FTX or served as brand ambassadors for the company” and promoted the exchange in advertisements and on social media, the document states.
Comedian Larry David, who appeared in an FTX commercial that aired during the last Super Bowl, was also nominated.
Doubts about cryptocurrency
FTX had also made a notable foray into the world of esports by forging a 10-year, $210 million partnership with TSM Group, known for its League of Legends team.
“After monitoring developments and discussing internally, we are suspending our partnership with FTX with immediate effect,” the company announced on Wednesday.
“This means the FTX branding will no longer appear on any of our organisation, team and player social media profiles, and will also be removed from our player shirts.”
Other cryptocurrency exchanges have invested in the sports world in recent years, taking advantage of the surge in the price of bitcoin and other virtual currencies from 2020.
Crypto.com is a sponsor of the World Cup, which kicks off in Qatar next week, has a strong presence in mixed martial arts and, among other deals, has sponsored events and teams in Formula 1, the NBA and Australian rules football.
In the English Premier League, OKX sponsors Manchester City and WhaleFin sponsors Premier League club Chelsea.
Socios, which markets blockchain tokens to fans, struck deals with six English clubs, a string of other top teams across Europe and bought nearly 25% of the Barcelona media studio this summer.
Regardless of the fear of signing big deals that then evaporate, the crypto industry could face increased regulation by US and European authorities.
John Fortunato, a professor at Fordham University’s business school in New York, said FTX’s dramatic fall will make teams and athletes reluctant to take money from other companies in the industry in the short term. .
“At the moment, there might be some reluctance to enter this product category,” he said.
“Sports leagues are quite resilient when it comes to finding revenue streams,” he added.
“They are always looking for opportunities and will find other sponsors,” he added.
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