The eventful downfall of the giant cryptocurrency exchange company FTX last week is expected to have far-reaching impact on sports.
The company announced this week that it would be acquired by rival Binance after experiencing a sudden liquidity crisis, only for the deal to be called off yesterday by Binance after the firm conducted a financial review of FTX.
FTX has invested heavily in sports sponsorships “including partnerships and naming rights in professional basketball, baseball and Formula One racing.”
In 2021, CNN’s Jennifer Korn reports, FTX inked a reported $135 million, 19-year deal with the NBA’s Miami Heat to rename the American Airlines Arena as FTX Arena.
“Major League Baseball struck a five-year deal in 2021 to name FTX as its official cryptocurrency exchange, a partnership that includes putting FTX patches on umpires’ uniforms. FTX is also the official cryptocurrency exchange partner of the Mercedes-AMG Petronas Formula One Team,” she writes.
Instructively, FTX “is not the only crypto company involved in the sports world. According to IEG, cryptocurrency brands spent more than $130 million on NBA sponsorships alone last season, up from less than $2 million the season before. Just five crypto companies, including Crypto.com, Coinbase and FTX, were responsible for 92% of the sector spending.
In 2021, Jennifer notes, trading platform Coinbase inked a multiyear agreement with the NBA to serve as the league’s exclusive cryptocurrency partner, reportedly worth $192 million over four years.
“Crypto.com, another cryptocurrency exchange, purchased the naming rights for the Los Angeles Lakers’ stadium in November 2021, a deal reportedly worth $700 million. It also entered a multiyear deal to become the Philadelphia 76ers’ official jersey patch partner.”
