The fall of Sam Bankman-Fried and FTX, once one of the world’s largest crypto exchanges, is rippling throughout the world. The now-bankrupt company may owe money to more than 1 million people, according to the New York Times, and among the many losers is the world of sports.
FTX, and crypto in general, has spent millions of dollars to advertise with professional football, basketball, baseball, and other sports. Now many such deals have gone bust. Here’s a look at some of the most serious athletics-related fallout from FTX’s implosion.
The Miami Heat needs a new stadium name.
Miami may be the crypto capital of the world, so it stands to reason that FTX wanted to plaster its brand there. The company bought the naming rights for the Heat’s arena last year, signing a 19-year, $135 million deal. Last week, the Heat and Miami-Dade County issued a statement announcing that they were ending their business relationship with Bankman-Fried’s outfit and looking for a sponsor to continue funding an anti–gun violence program that was integral to the FTX deal.
In the annals of sports business, there are quite a few precedents for the Heat’s predicament. There was Philadelphia’s Wachovia Center, which became the Wells Fargo Center when that company bought out Wachovia during the financial crisis. There was the MCI Center in Washington, D.C., which became the Verizon Center after WorldCom, which had purchased MCI, collapsed amid an accounting scandal. The most notorious example — and probably the one that holds the closest parallels to the current mess — is Enron Field in Houston. When Enron, an energy juggernaut whose complicated financials turned out to be built on sand (sound familiar?) went belly up, the Astros’ home became Minute Maid Park. The lesson: Sometimes it pays to go with stable entities like orange juice.
With the intense instability of the crypto world at large, one has to wonder about the longevity of Crypto.com Arena, as the Lakers’ home in Los Angeles — formerly the Staples Center — is now known. Last year, that company paid $700 million for the naming rights in a 20-year-deal. Let’s check back on its stability in 2041.
The NFL will need some new Super Bowl advertisers.
Anyone watching this year’s Super Bowl couldn’t fail to notice that ads for crypto dominated the game’s famously expensive commercial breaks. In an FTX ad that now “hits different,” as the kids say, Larry David plays a crank (a.k.a. himself) who expresses skepticism about every great idea throughout history — the message being that cryptocurrency belongs in the same conversation as epochal innovations like the wheel or democracy.
Turns out skepticism was the right call this time around.
As with the stadium naming-rights fiasco, an episode from a generation ago comes to mind. In 2000, with the dot-com boom in full swing, once-mighty companies such as Pets.com ruled the airwaves of Super Bowl XXXIV. Who could forget this classic?
By the end of the year, the dot-com bubble had burst and Pets.com was out of business.
This year’s Super Bowl ads were part of a larger crypto-marketing blitz in 2021 and early 2022, often featuring A-list celebrities. There was Matt Damon’s notorious “Fortune Favors the Brave” commercial, Reese Witherspoon’s proclamation that “crypto is here to stay,” and another FTX ad that has aged extremely poorly in just a few months, featuring the now-divorced couple Tom Brady and Gisele Bündchen:
All these bold-faced names hawking volatile, vaguely scammy-feeling financial products, both in commercials and elsewhere, drew plenty of flak at the time. But the naysayers’ warnings were proved true even more quickly than most of them probably expected. A few months later, it sure looked as though taking financial advice from the star of the Bourne Identity was a bad idea after all.
Other sports sponsorships are disappearing.
If you watched the baseball playoffs, you may not have noticed that umpires wore FTX patches on their uniforms this season. It turns out FTX has been the “Official Cryptocurrency Exchange brand of MLB” since the summer of 2021, and per SportTechie, MLB wasn’t shy about promoting it:
The history of Major League Baseball dates back to the 1800s, but FTX became the first ever brand to have its logo appear on the uniform patches of umpires beginning at the 2021 All-Star Game in Denver and continuing through the 2022 season. Shortly after MLB signed its reported five-year deal with FTX in June 2021, the league hosted its MLB Moon Blasts Pick ‘Em contest presented by FTX that offered $50,000 worth of Bitcoin to be deposited into the winner’s FTX account. MLB held a similar prediction contest with FTX that promoted a $100,000 grand crypto prize this past season.
The site reports that MLB is “speaking with its legal counsel” to figure out how to proceed, but it seems likely the patches will disappear next year.
Other fallout from around the country and world: FTX signed a deal with the Mercedes-AMG Petronas Formula One team, which saw its logo plastered on the company’s race cars. Mercedes has now suspended that partnership. And the Golden State Warriors also suspended their promotional deal with FTX. Yahoo reports that “the final promotion will be the Jordan Poole bobblehead giveaway at the Chase Center for the matchup.” Get ’em while you can.
Tom Brady is really taking it on the chin.
This summer, Brady and Bündchen signed a long-term partnership with FTX. Brady was named an “ambassador” for the company, while Bündchen served as the company’s “environmental and social initiatives adviser.” Both took equity stakes in the company, and both stand to lose quite a bit of money — though just how much is unclear.
Gawker reported that Brady’s team was attempting to scrub some evidence of his heavy involvement with FTX off the internet — for example, the immortal quote, “It’s an incredibly exciting time in the crypto world, and Sam and the revolutionary FTX team continue to open my eyes to the endless possibilities.”
Other athletes will feel the burn, too.
It’s not just Brady and Bündchen who were entangled with FTX. CBS News reports that Steph Curry (who cut an FTX ad) was a partner who held equity in the company and that tennis star Naomi Osaka had a similar deal. MLB star Shohei Ohtani was an “ambassador,” like Brady, as were Shaquille O’Neal and David Ortiz. Most of if not all of their sponsorship money came in the form of crypto, so presumably even those who aren’t personally invested in the company are suffering from the crypto sector’s decline.
But it’s hard to shed a tear for some of the highest-paid people in society. It’s easier to lament that their influence led so many average Americans to invest in a rickety, unstable system.
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