With the downfall of cryptocurrency exchange FTX, many associated sports stars could end up rueing the day they got involved with Sam Bankman-Fried.
Sam Bankman-Fried seems one swing away from striking out, especially since Binance’s hail-Mary to acquire his ailing exchange ended up in failure. At this stage in the game, investors in Bankman-Fried’s companies face substantial losses, many of whom are prominent sports stars.
Sports Stars Taking a Hit
The highest profile among Bankman-Fried’s athlete partners is NFL legend Tom Brady. Last year, Brady and his ex-wife supermodel Gisele Bündchen closed an equity deal with Bankman-Fried’s FTX.com and FTX.US. The terms of the deal were not disclosed, but saw the couple take an equity stake in FTX.
Brady subsequently became an ambassador for the exchange, while Bündchen became an advisor for FTX’s Environmental and Social Initiatives. As the pair became public faces for the exchange, they also made a $650 million investment in the company. That investment and their equity stake now appear to be worth substantially less.
Despite winning another NBA championship since inking a deal with FTX, Stephen Curry seems like he will also lose on this investment. The four-time NBA champion also took an equity stake in the firm, upon signing a partnership with FTX last year. It is unclear what will happen with his charitable foundation Eat.Learn.Play, support for which was also part of the deal.
Other notable athletes who became global ambassadors for FTX in exchange for an equity stake in the company include tennis star Naomi Osaka, and baseball player Shohei Ohtani. Both also agreed to receive compensation in cryptocurrencies as part of their sponsorship deals.
Canny in promoting its brand, FTX also signed naming rights agreements with several sports stadiums. These include paying $17.5 million for the naming rights of UC Berkeley’s football stadium, as well as $135 million for the rights to the Miami Heat’s home arena. It would seem these naming rights will soon be up for grabs.
Other Big Names Impacted by Exchange Collapse
Another sports-related investor, Barstool Sports founder Dave Portnoy asked what would become of his crypto stored with FTX. Answering his question, Ripple chief technology officer David Schwartz said Portnoy would be treated as a creditor. This would add him to the long list of creditors FTX now faces.
These include hedge funds, Tiger Global Management, Third Point and Altimeter Capital Management. FTX had also attracted capital from the Ontario Teachers’ Pension Plan, Sequoia Capital, Lightspeed Venture Partners, Iconiq Capital, Insight Partners, Thoma Bravo and Masayoshi Son’s SoftBank Group Corp.
Tiger Global and Ontario Teachers’ first invested in FTX in Dec. 2019 then doubled down in Oct. 2021, and again in Jan. 2022. These investors, among others, are set to lose all or most of their capital.
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Source: https://beincrypto.com/tom-brady-steph-curry-among-stars-affected-ftx-collapse/