Beleaguered cryptocurrency exchange FTX was almost saved from sudden collapse by rival Binance, but the deal fell through on Nov. 9. As a result, the future of the firm, once valued at $32 billion, is now in doubt.
Founder Sam Bankman-Fried apologized to investors on Twitter as speculation swirled that the company may file for bankruptcy. “‘I,’ ultimately, should have been on top of everything,” wrote Bankman-Fried, on Twitter on Nov. 10. “I clearly failed in that. I’m sorry.”
The fallout from the company’s financial woes may be the fate of its many sports deals. In the last couple of years, FTX has aggressively pursued a wide range of sponsorship deals in the sports world.
FTX has struck deals around the world to associate its name with major athletes and sports franchises. Those are all now in question. Last year, it paid $135 million to rename the National Basketball Association’s (NBA) Miami Heat arena (formerly American Airlines Arena) as FTX Arena for the next 19 years. Similarly, the crypto exchange struck a sponsorship deal with Major League Baseball (MLB) that put the FTX logo on the jersey of every umpire.
The National Football League’s (NFL) biggest star, Tom Brady, along with his wife Gisele Bündchen, became brand ambassadors in exchange for equity in FTX. FTX struck similar equity deals with MLB star Shohei Otani and NBA champion Steph Curry. Along with direct sports celebrity relationships, FTX also engaged in sponsorship deals with the NBA’s Golden State Warriors, the Mercedes-AMG Petronas F1 racing team, and esports team TSM (a deal worth $210 million).
Sports sponsorships and naming rights are among the most frequently used marketing instruments brands use to garner the trust of consumers who may be unfamiliar with their services. Several of the FTX deals were designed to be multi-year relationships, but in the wake of the exchange’s seeming imminent collapse, the FTX logo may soon vanish from many of the high-profile sports brands it worked so diligently to cozy up to.