Major League Baseball confirmed Thursday that it has ended its sponsorship with FTX following the cryptocurrency exchange’s “jarring” bankruptcy, the latest knock-on effect in the sports industry after the once lucrative sponsor went up in flames.
FTX became the “Official Crypto Exchange Brand of MLB” last summer, and MLB umpires wore FTX logo patches on their uniforms from July 2021 until the World Series that concluded earlier this month.
MLB Commissioner Rob Manfred told reporters Thursday that FTX is no longer a sponsor of the league and umpires will no longer adorn its logo, saying FTX’s “development has been a little jarring” and promising the league will ” will proceed with caution in the future.”
MLB wasn’t the only sports venture due to its association with FTX, which filed for bankruptcy last week and ousted its former founder and billionaire CEO Sam Bankman-Fried, as the company invested millions of dollars in other sports initiatives.
FTX became the title sponsor of the home arena of the NBA’s Miami Heat 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 reached a $210 million naming rights deal with the world’s most valuable esports organization TSM last June (all three organizations ended their deals with FTX after it went bankrupt).
The swap 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 among the dozens of celebrity FTX endorsers named in a proposed class action lawsuit filed earlier this week seeking damages for their role in promoting FTX.
Cryptocurrency firms have pledged more than $3 billion in endorsement money to the sports industry, GlobalData head of sports analytics Conrad Wiacek wrote in email comments last week, calling the FTX crash a “seismic moment for the sports sponsorship industry”. Valued at $32 billion in January with backing from major institutional investors, FTX’s sudden collapse came after revelations of unscrupulous practices at the company and Bankman-Fried’s trading firm, Alameda Research. Cryptocurrencies have particularly caught on among top athletes, with several top players like NFL star Aaron Rodgers taking part of their paychecks in bitcoin.
Manfred said on Thursday his “expectation” is to reach a collective bargaining agreement with the sport’s minor leagues before the 2023 season kicks off in April. MLB voluntarily recognized the minor league union in September after years of criticism of labor practices and congressional oversight.
FTX has spent heavily on sports sponsorships. What happens now? (New York Times)
Tom and Gisele Reunite as Defendants in FTX Class-Action (Forbes)