The collapse of cryptocurrency exchange FTX sent shockwaves through the sport, which the platform has used extensively to build its brand.
FTX signed a number of endorsement deals and recruited sports stars to appear in commercials, often airing during sports programming.
Since the company’s bankruptcy announcement last week, many sports organizations have been quick to withdraw from partnerships.
The Mercedes Formula 1 team have removed the FTX logos from their Formula 1 cars ahead of last Sunday’s Brazilian Grand Prix.
NBA basketball team the Miami Heat has dropped its deal with FTX, after inking a $135 million deal for the naming rights to the arena in March 2021.
FTX Arena, formerly known as Miami Arena and American Airlines Arena, will once again be renamed. Photos on social media showed that the FTX logo had already been removed.
The debacle has also taken a legal turn.
On Wednesday, an investor filed a lawsuit in Miami against the company, its former boss Sam Bankman-Fried and several famous athletes.
These included basketball player Stephen Curry and his Golden State Warriors team, former NBA star Shaquille O’Neal, tennis player Naomi Osaka and NFL quarterback Tom Brady.
The investor, Edwin Garrison, of Oklahoma, accused the company of “false statements and omissions.”
“Some of the biggest names in sports and entertainment have either invested in FTX or served as brand ambassadors for the company” and promoted the exchange in ads and on social media, the filing said.
Comedian Larry David, who appeared in an FTX commercial that aired during the latest Super Bowl, was also nominated.
– Doubts about cryptocurrencies –
FTX has also made a notable foray into the world of e-sports by creating a 10-year, $210 million partnership with TSM Group, known for its League of Legends team.
“After monitoring the evolving situation and discussing internally, we are immediately suspending our partnership with FTX,” the company announced Wednesday.
“This means that the FTX branding will no longer appear on any of our organisation’s, team’s and player’s social media profiles and will also be removed from our players’ jerseys.”
More cryptocurrency exchanges have invested in the sports world in recent years, benefiting from the surge in the price of bitcoin and other virtual currencies since 2020.
Crypto.com is a sponsor of the World Cup, which kicks off in Qatar next week, has a strong presence in mixed martial arts, and has sponsored events and teams from Formula 1, the NBA, and Australian Rules Football, among other offerings.
In the English Premier League, OKX sponsors Manchester City and WhaleFin is a sponsor of Premier League club Chelsea.
Socios, which markets blockchain tokens to fans, has deals with six English clubs, a number of other major teams across Europe and bought nearly 25% of Barcelona’s media studio in the summer.
Aside from the fear of signing large contracts which then vanish, the cryptocurrency industry may face increased regulation from US and European authorities.
John Fortunato, a professor at the Fordham University business school in New York, said the dramatic drop in FTX would make teams and athletes wary of taking money from other companies in the industry in the near term.
“For now, there may be some reluctance to enter this product category,” he said.
“Sports leagues are pretty resilient when it comes to finding revenue streams,” he added.
“I’m always looking for opportunities and will find other sponsors,” he added.