Topline
Major League Baseball confirmed Thursday it terminated its sponsorship with FTX following the cryptocurrency exchange’s “jarring” bankruptcy, the latest ripple effect in the sports industry after the once-lucrative sponsor went up in flames.
MLB and FTX’s partnership lasted less than two seasons.
Key Facts
FTX became the “official cryptocurrency exchange brand of MLB” last summer, and MLB umpires wore FTX logo patches on their uniforms from July 2021 through the World Series that ended earlier this month.
MLB Commissioner Rob Manfred told reporters Thursday FTX is no longer a league sponsor and umpires will no longer adorn its logo, saying the “FTX development was a little jarring” and promising the league would “proceed with caution in the future.”
MLB was not the only sports enterprise snakebit by its association with FTX, which filed for bankruptcy last week and ousted its one-time billionaire founder and CEO Sam Bankman-Fried, as the company invested millions of dollars into other sports ventures.
FTX became the title sponsor of the NBA’s Miami Heat’s home arena in March 2021 in a $135 million deal, sponsored the University of California, Berkeley’s home football stadium last August for $17.5 million and struck a $210 million naming rights deal with the world’s most valuable eSports organization TSM last June (all three organizations terminated their deals with FTX after it went bankrupt).
The exchange also struck endorsement deals with many of the world’s top athletes, including 2021 American League most valuable player Shohei Ohtani, Baseball Hall of Famer David Ortiz and Tampa Bay Buccaneers quarterback Tom Brady, all of whom were among the dozen celebrity FTX endorsers named in a proposed class-action lawsuit filed earlier this week seeking damages for their role in promoting FTX.
Key Background
Crypto companies committed more than $3 billion in sponsorship money to the sports industry, GlobalData’s head of sports analysis Conrad Wiacek wrote in emailed comments last week, calling the FTX collapse a “seismic moment for the sports sponsorship industry.” Valued at $32 billion in January with backing from major institutional investors, FTX’s sudden crumbling came after revelations of unscrupulous practices at the company and Bankman-Fried’s trading firm Alameda Research. Crypto particularly took hold among prominent athletes, with several top players like NFL star Aaron Rodgers taking parts of their salaries in bitcoin.
Tangent
Manfred said Thursday his “expectation” is to reach a collective bargaining agreement with the sport’s minor leaguers before the 2023 season begins in April. MLB voluntarily recognized the minor league union in September after years of criticism about labor practices and congressional scrutiny.
Further Reading
FTX Spent Big on Sports Sponsorships. What Happens Now? (New York Times)
Tom And Gisele Together Again As Defendants In FTX Class-Action (Forbes)
Source: https://www.forbes.com/sites/dereksaul/2022/11/17/mlb-latest-sports-enterprise-to-distance-itself-from-one-time-prominent-sponsor-ftx/