Tom Brady and Steph Curry among stars caught up in crypto drama
Sports teams received the multi-million dollar partnerships in 2021 from cryptocurrency companies such as FTX, an exchange for trading digital assets.
The sudden demise and pending acquisition of FTX, a popular cryptocurrency exchange, by Binance on Nov. 8 leaves the future of these partnerships up in the air.
Investors have often been wary of companies that buy naming rights to stadiums because of the large investment. Many of these deals involving naming rights appear to be doomed, and the companies that spent hundreds of millions of dollars end up filing for bankruptcy protection later.
Miami Heat Home changed to FTX Arena
In 2021, FTX agreed to a 19-year deal to pay $135 million to change the name of the home of the NBA’s Miami Heat to FTX Arena. It had been named American Airlines Arena since 1999 after it opened.
Crypto.com in 2021 agreed to a 20-year deal to commit $700 million to rename the former Staples Center, home of the LA Lakers, another NBA team.
Both deals were made before the crypto winter, the bear market in virtual currencies that wiped out billions of dollars in valuation.
Major League Baseball Partnership
Founded in 2019 by Sam Bankman-Fried, FTX invested and partnered with various sports teams, including Major League Baseball (MLB), just two years later, spending millions of dollars.
In June 2021, MLB, which includes the 30 baseball teams in the United States, selected FTX as its official cryptocurrency exchange brand in a five-year agreement.
Ohtani received a stake in FTX
Bankman-Fried’s sponsorship of major sports teams and athletes includes the Los Angeles Angels’ Shohei Ohtani, a dual-threat superstar as a pitcher and a hitter. He was chosen as FTX’s global ambassador last November. He got a stake in the company in return, the founder told CNN.
Ohtani’s compensation was paid for by an undisclosed ammo of equity in FTX and in cryptocurrency.
“He’s obviously one of the most electric players in all of sports right now,” Bankman-Fried, whose net worth was valued at $26.5 billion by Forbes in November 2021, told CNN. Bankman-Fried’s net worth was $15.6 billion as of Nov. 7, according to the Bloomberg Billionaires Index. However, it has been hit hard by the events of the last 24 hours.
FTX also became involved in the world of auto racing by serving as the first cryptocurrency exchange partner of the Mercedes-AMG Petronas Formula One Team. The partnership included motorsports fans being able to trade crypto through the FTX app, buy sell and create NFTs using the FTX NFT Marketplace and pay for daily purchases with crypto through FTX Pay.
The partnership allowed FTX to have its logo on both the Formula 1 cars and the drivers’ racing suits and outfits.
Part of the FTX branding was unveiled during the last Russian Grand Prix. Formula 1 has canceled future races in Russia due to the invasion of Ukraine.
Curry, Brady, Bündchen signed deals
Basketball star Stephen Curry also signed a partnership with FTX in September 2021, which was his first investment in the crypto industry.
Curry, who plans for the Golden State Warriors, tweeted about the deal, saying “Just getting into the crypto game…any advice??’
Curry’s foundation, Eat.Learn.Play., also partnered with the exchange on charitable initiatives.
Football superstar Tom Brady and model Gisele Bündchen also have a stake in FTX and acted as for FTX.
The equity stake was not disclosed, but FTX said it would receive an unspecified amount and type of crypto.
In August 2021, the Cal Golden Bears signed a 10-year, $17.5 million naming rights deal with FTX.
Bankman-Fried’s other investments
Bankman-Fried bought a 7.6% stake in May in Robinhood, a brokerage meant to attract millennial investors seeking to invest in cryptocurrencies.
Robin Hood (HOOD) – Get a free report shares tumbled on November 8, plunging as much as 15.54% in mid-day trading to $10.22 a share, as crypto giant Binance said it would buy one-time rival FTX due to a “liquidity crisis”.
The pending deal whose terms were not disclosed surprised investors since Binance founder Changpeng Zhao and Bankman-Fried battled for months on social media, including a major clash this week.
“To protect users, we signed a non-binding LOI, intending to fully purchase FTX and help cover the liquidity crunch,” Zhao said in a tweet. “We will conduct a full DD in the coming days.”
Bankman-Fried recently struck a deal with Anthony Scaramucci, who was briefly White House communications director under former President Donald Trump. FTX Ventures will buy 30% of Skybridge Capital, the alternative investment firm founded by Scaramucci, aka “The Mooch.”
Venture capital firms made major investments in FTX in 2021, with Sequoia providing $420 million in a round that boosted the stock’s valuation to $25 billion in October 2021. A consortium with Paradigm invested $400 million in January 2022, bringing the valuation to a whopping 32 billion dollars.
The first investor to fund FTX was Binance, the largest global crypto exchange, but the relationship between the two companies crumbled as FTX gained popularity and fans.
