MLB’s newest sports company distances itself from former prominent sponsor FTX

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Major League Baseball confirmed Thursday it had ended its sponsorship with FTX following the cryptocurrency exchange’s “harrowing” bankruptcy, the latest domino effect in the sports industry after the once-lucrative sponsor went up in flames.

Important facts

FTX became MLB’s “official cryptocurrency exchange brand” last summer, and MLB umpires wore FTX logo patches on their uniforms from July 2021 through the World Series, which ended earlier this month.

MLB Commissioner Rob Manfred told reporters Thursday FTX is no longer a sponsor of the league and umpires will no longer adorn its logo.

MLB wasn’t the only sports company through its association with FTX to file for bankruptcy last week, ousting its billionaire founder and CEO Sam Bankman-Fried as the company poured millions of dollars into other sports companies.

FTX became the title sponsor of the NBA’s home arena, the Miami Heat, in a $135 million deal in March 2021, sponsored the University of California, Berkeley’s home soccer stadium, for $17.5 million last August, and inked a $210 million naming rights deal US dollars with the world’s most valuable eSport from organization TSM last June (all three organizations went out of business with FTX after it went bankrupt).

The exchange also struck endorsement deals with many of the world’s top athletes, including 2021 American League Most Valuable Player Shohei Ohtani, Baseball Hall of Fame inductee David Ortiz, and Tampa Bay Buccaneers quarterback Tom Brady, all among the dozen celebrities FTX endorsers were named in a proposed class action lawsuit filed earlier this week seeking damages for their role in promoting FTX.

key background

Crypto companies have provided more than $3 billion in sponsorship money to the sports industry, GlobalData’s head of sports analytics, Conrad Wiacek, wrote in emailed comments last week, calling the collapse of FTX a “seismic moment for sports sponsorship.” industry”. FTX was valued at $32 billion in January and backed by large institutional investors. FTX’s sudden collapse came after revelations of unscrupulous practices by the company and Bankman-Fried’s trading firm Alameda Research. Crypto has particularly caught on with celebrity athletes, with several top players such as NFL star Aaron Rodgers drawing part of their salary in Bitcoin.

tangent

Manfred said on Thursday his “expectation” was to reach a collective agreement with the sport’s smaller leagues before the start of the 2023 season in April. MLB voluntarily recognized the minor league union in September after years of criticism of labor practices and congressional scrutiny.

Further reading

FTX spent heavily on sports sponsorship. What’s happening now? (New York Times)

Tom and Gisele back together as defendants in FTX class action lawsuit (forbes)

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