Crypto Giant FTX’s Massive Implosion Likely Means Curtains for Cal’s $17.5 Million Naming Rights Deal

Cryptocurrency brand FTX went from $32 billion to bankruptcy in just nine days, and the Cal football stadium’s $17.5 million naming rights deal is likely to go down the drain with it.

You may not have followed the spectacular flame out of cryptocurrency exchange FTX, which just filed for bankruptcy on Friday morning. But if you’re a Cal Bears football fan, or if you’re interested in the financial health of UC Berkeley, you’ll have some interest in this astonishing to some, completely predictable to the rest of us crypto doom. Just 14 months ago, this crypto company FTX bought the naming rights to Cal Memorial Stadium for $17.5 million. So… what the hell is going on with Cal’s stadium now?

First: FTX is the very company that ran the Larry David Super Bowl ad seen above, the one that mocked cryptocurrency skeptics, and oh, how delicious the irony is on so many levels right now. They were one of the most trusted brands in an industry that rightly drew mainstream skepticism. But an article in Coindesk on Nov. 2 revealed that it was essentially a check-kiting scheme that appears to have been rife with fraud and manipulation. There was a quickly arranged fire sale acquisition of top competitor Binance in place earlier this week, but Binance took a look at FTX’s finances and immediately backed it. So FTX is now toast, leaving a trail of burned VC investors, sports stars and, in Cal’s case, a naming rights deal.

The Chronicle covers this in an article headlined “FTX bankruptcy hits Bay Area venture capital firms — and the Warriors, Steph Curry and UC Berkeley.” Most of us could care less about the Bay Area venture capital firms, it was a spectacularly stupid investment by the billionaires, c’est la vie. Yes, Warriors called FTX their “Official Cryptocurrency Platform and NFT Marketplace”, but these words don’t even mean anything, it’s like being “the official grape jam of the Winter Olympics.” And yes, Steph Curry did some commercials for them, but whatever. Steph got paid, I’m sure.

UC Berkeley is another matter. It is a real school. What happens to UC Berkeley and the Cal football stadium now that the naming rights deal has surely collapsed?

We can look at the NBA’s Miami Heat, who also sold the arena’s naming rights to FTX. The dissolved that agreement about 40 minutes before we published this article. Expect the same from Cal soon.

“If there’s no company, the branding disappears,” Columbia University sports management professor Joe Favorito told Business Insider. “The bigger concern is that if you sold rights and you’re expecting revenue to come in that hasn’t come in, then you’re going to have a problem.”

Cal probably still owes money on the 10-year deal, and this likely means their salespeople will have to hit the pavement and look for another sponsor. Although it was widely reported at the time of the deal that the $17.5 million “will be paid for entirely in cryptocurrency,” that was never entirely true. As the Bay Area News Group explained, “The deal was brokered by Learfield, Cal’s multimedia rights partner,” and that “FTX will use cryptocurrency to pay Learfield, which will then make annual payments to Cal in cash.”

So UC Berkeley is unlikely to take a bath here. But they are losing out on millions in money they had counted on, and we hope they do a little more due diligence before signing a new 10-year naming rights agreement.

Related: Cal Takes Cryptocurrency Naming Rights Deal for Memorial Stadium [SFist]

Photo: CalBears.com