The sports world is trying to sidestep the collapse of sponsor FTX

The collapse of cryptocurrency exchange FTX sent shockwaves through the sport, which the platform used extensively to build its brand.

FTX signed a number of sponsorship deals and recruited sports stars for commercials, often aired during sports programs.

Since the company’s bankruptcy announcement last week, many sports organizations have quickly pulled out of partnerships.

The Mercedes Formula One team removed the FTX logos from its Formula One cars ahead of last Sunday’s Brazilian Grand Prix.

The Miami Heat NBA basketball team terminated its contract with FTX after signing a $135 million deal for the arena naming rights in March 2021.

FTX Arena, previously known as Miami Arena and American Airlines Arena, will change names again. Photos on social media showed that the FTX logo had already been removed.

The debacle has also taken a legal turn.

On Wednesday, a Miami investor filed a lawsuit against the company, its former boss Sam Bankman-Fried and several famous athletes.

These included basketball player Stephen Curry and his team, the Golden State Warriors, former NBA star Shaquille O’Neal, tennis player Naomi Osaka, and NFL quarterback Tom Brady.

Oklahoma investor Edwin Garrison accused the company of “misrepresentations and omissions.”

“Some of the biggest names in sports and entertainment have either invested in FTX or been brand ambassadors for the company” and have hyped the exchange in ads and on social media, the document said.

Comedian Larry David, who appeared in an FTX commercial that aired during the last Super Bowl, was also named.

– Doubts about cryptocurrency –

FTX had also made a notable foray into the world of esports by entering into a 10-year, $210 million partnership with TSM Group, known for its League of Legends team.

“After monitoring and internally discussing the evolving situation, we are suspending our partnership with FTX effective immediately,” the company announced on Wednesday.

“This means that the FTX branding will no longer appear on our social media profiles of our organisations, teams and players, and will also be removed from our player jerseys.”

Other cryptocurrency exchanges have invested in the sports world in recent years, benefiting from the rising prices of bitcoin and other virtual currencies as of 2020.

Crypto.com is a sponsor of the World Cup starting next week in Qatar, has a strong mixed martial arts presence and has sponsored events and teams in Formula 1, the NBA and Australian Rules Football, among others.

In the English Premier League, OKX sponsors Manchester City and WhaleFin sponsors Premier League club Chelsea.

Socios, which markets blockchain tokens to fans, has deals with six English clubs, a number of other big teams across Europe and bought nearly 25 percent of Barcelona’s media studio over the summer.

Aside from the fear of signing large deals that then evaporate, the crypto industry could face increased regulation from US and European authorities.

John Fortunato, a professor at Fordham University’s Business School in New York, said FTX’s dramatic decline would make teams and athletes reluctant to accept short-term money from other companies in the industry.

“For now, there might be some reluctance to enter this product category,” he said.

“Sports leagues are pretty resilient when it comes to finding revenue streams,” he added.

“They are always looking for opportunities and will find other sponsors,” he added.

dho/juj/pb/fg

source

Leave a Reply

Your email address will not be published. Required fields are marked *