Tom Brady, Steph Curry and Shohei Ohtani have all partnered with cryptocurrency exchange FTX. But now those partnerships – and FTX – are gone.
FTX filed for bankruptcy on Friday after spending the last several years aggressively recruiting athletes and celebrities and sponsoring arenas. Curry acquired a stake in FTX in exchange for becoming a “global ambassador,” which meant dressing up as a pantomime in an embarrassing commercial.
FTX signed a 19-year, $135 million deal to rename the Miami Heat’s arena after their company. They signed a smaller deal – 10 years for $17.5 million – with the California Golden Bears to call their home FTX Field at Memorial Stadium. They made deals with Major League Baseball – where umpires wore an FTX patch – Tom Brady and his soon-to-be ex-wife Gisele Bundchen, Shaquille O’Neal, Ohtani, Naomi Osaka, Jaguars QB Trevor Lawrence, Mercedes-AMG Petronas F1- Team, the Golden State Warriors, David “Big Papi” Ortiz and the NBA’s oldest player, Udonis Haslem.
If all these athletes, like Curry and Brady, have cryptocurrency or FTX equity in their trades, they’ve lost a lot of money. The same goes for every fan who has followed the support of these athletes and invested in FTX themselves. The Miami Heat will surely have a new arena name soon, Cal needs a new field sponsor, and the Warriors need a backup crypto partner. Or maybe a better idea would be no crypto partner at all.
FTX’s rapid decline is also impacting other deals in this space. A year ago, Crypto.com announced a 20-year, $700 million deal with the Lakers to rename the Staples Center. Crypto.com has laid off at least 40 percent of its workforce since June. The Lakers can’t trust Crypto.com for the next 20 weeks, let alone 20 years. They’re also the jersey patch sponsor for the 76ers — at least for now. There have also been massive layoffs at Coinbase, the “NBA’s exclusive cryptocurrency platform partner.”
Peter Laatz, global managing director of sports partnership consultancy IEG, told CNN Business, “It happened during the dot-com era when a bunch of buildings, mostly baseball stadiums, were named after all these rickety dot-com companies, and they all went horribly wrong. Naming rights deals are just so hard to pull off, it’s even harder to get consumers thinking that Staples and American Airlines Arenas have different names now, and it’s even harder to research.”
The replacement of the sponsorship contracts is time-consuming and expensive for the teams, schools and leagues. Perhaps we should have heeded Larry David’s skepticism about FTX’s Super Bowl ads.