Over $300 million Commitments in Sports Marketing Suspended as FTX Group Empire Crumbles
The looming end of the FTX rocket ride from its launch in 2019 to a $32 billion valuation drags along the multiple sports marketing commitments initiated to raise customer awareness.
The bankruptcy filing initiated in the US and Bahamas is compelling the suspension of the hundred-dollar million commitments to sports leagues and teams. Citing the liquidity crunch that led FTX to file for Chapter 11 bankruptcy, sports partners are convinced of the capability to honor the agreement and potential reputational damage. The public collapse necessitated the prominent deals in 2021-22 when FTX was flush with cash.
Multiple Sports Marketing Deals
FTX racked up several deals in 2021, including Miami Heat’s stadium naming rights and Warrio’s’ G league brand placement. Also, FTX agreed with Major League Baseball to have its logo patch on the umpire’s uniform. Besides, FTX agreed to have in-arena signage within the Chase Center, TSM esports naming rights, and an official exchange partner for Washington Wizards and Capitals. Most partners have ended the deals, while others seek to break free from the alliances.
Mercedes-AMG Petronas acknowledged the disappointing revelation of the FTX liquidity crunch to suspend sponsorship of its formula one racing team. While Mercedes jointly launched F1-themed NFTs, collectors cannot withdraw them from the locked platform. Since then, the F1 firm has removed FTX branding.
Stream of Suspension Hit FTX Deals
Miami-Dade County, alongside Miami Heat, regretted the extremely disappointing development. The duo announced to initiate of the process to terminate involvement with FTX and find an alternative naming rights partner. While the announcement stayed clear of the initial payment honored by FTX, it ended the $135 million deal anticipated to run for 19 years.
Brazilian-based esports team Furia discontinued the sponsorship on November 11. In the statement conveyed via Twitter, André Akkari terminated the $3.2 million deal prioritizing its fans to withdraw from partners harming users. Joining sports partners terminating the multi-year deal was NBA’s Golden State Warriors in ending the $10 million deal. It announced ceasing to promote and advertise FTX exchange.
Team SoloMid (TSM) conveyed the cancellation of the $210 million 10-year-deal. It declared removing the FTX branding on all social media platforms and jerseys. The athletics department terminated US Berkeley deal with FTX ending the $17.5 million sponsorship.
Joining the list of sports partners suspending the marketing commitments include Major League Baseball’s decision to remove the FTX patch and Riot Games’ ending sponsorship of the League of Legends Championships.
Athletes Endorsements as Stake
Steph Cury, alongside other major athletes, including Naomi Osaka, Tom Brady, and Shohei, was enjoined in the class action suit for their input in endorsing the FTX exchange. The contagion fears witnessed as FTX partners suffer reputational damage will likely prompt Monumental Sports and Entertainment’s Washington-based teams, such as Capitals, Mystics, and Wizards, to terminate the deals.
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