Thursday December 7, 2023

FTX, Once a High-Profile Sports Sponsor, Files for Bankruptcy

  • Binance recently backed out of a deal to acquire FTX.
  • FTX was valued at $32 billion in January.
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A cryptocurrency platform has filed for bankruptcy — which could have serious ramifications for its partners across sports.

FTX announced on Friday that the company, along with West Realm Shires Services Inc., Alameda Research Ltd., and roughly 130 affiliated companies, “have commenced voluntary proceedings under Chapter 11.”

Before the announcement, the fallen crypto giant — whose CEO Sam Bankman-Fried resigned on Friday — was looking to secure $8 billion after Binance backed out of a deal to acquire the platform.

Valued at $32 billion in January, FTX had made a name for itself in the sports industry in recent years. The bankruptcy filing raises questions about its numerous high-profile sponsorships.

Miami-Dade officials who negotiated a 19-year, $135 million contract with the platform for naming rights to the Miami Heat’s home arena hinted at legal action if FTX is unable to meet its obligations.

In a joint statement to Front Office Sports on Friday night, the Heat and Miami-Dade County said they “are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena.”

Mercedes’ Formula 1 team, which initially claimed it would keep the FTX logos on its cars during the Sao Paulo Grand Prix this weekend, reversed course on Friday, suspending its agreement.

MLB, the Golden State Warriors, UC Berkeley, Tom Brady, Steph Curry, and Shohei Ohtani had also struck deals with FTX.

Crypto Collision 

FTX isn’t the first crypto exchange bankruptcy to disrupt the sports world.

Voyager entered an agreement with the NWSL in December 2021 in which players would receive a portion of the proceeds from the deal in cryptocurrency — but filed for bankruptcy in July. In September, FTX won Voyager’s assets for $1.4 billion.

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