The file for bankruptcy that was started in the United States and the Bahamas is forcing the suspension of the one hundred million dollar promises that were made to various sports leagues and teams. Partners in the sports industry are confident that they will be able to respect their contract despite the liquidity crisis that forced FTX to apply for Chapter 11 bankruptcy protection. They are also concerned about the possible harm to their brand. The catastrophic failure of the public market made the significant transactions in 2021 and 2022, when FTX had a plenty of cash, necessary.

Multiple agreements for sports marketing

FTX executed a number of transactions in 2021, including one for the naming rights to the Miami Heat stadium and another for the G league brand placement of the Warriors. Additionally, FTX came to an agreement with Major League Baseball to have its emblem patch sewn onto the uniforms of the umpires. In addition, as part of the agreement, FTX will have in-arena signage within the Chase Center, naming rights for TSM esports, and will serve as an official exchange partner for the Washington Wizards and Capitals. The majority of partners have terminated the arrangements, while the remaining partners are working toward distancing themselves from the partnerships.

After the disheartening news that the FTX financial constraint had been revealed, Mercedes-AMG Petronas made the decision to terminate their sponsorship of their formula one racing team. Despite the fact that Mercedes and F1 jointly launched NFTs with a Formula One theme, collectors are unable to remove them from the closed platform. Since then, the Formula One company has eliminated all branding associated with FTX.

FTX Deals Were Affected by the Flow of Suspensions

Along with the Miami Heat, Miami-Dade County expressed their disappointment at the highly disheartening turn of events. The two parties made the announcement that they will start the procedure to end their participation with FTX and look for a new naming rights partner. The statement did not address the original payment that had been fulfilled by FTX; however, it did bring an end to the $135 million arrangement that was expected to run for 19 years.

On November 11, the Brazilian esports team Furia announced that they would no longer accept the sponsorship. In the message that was disseminated via Twitter, André Akkari explained that he had decided to terminate the $3.2 million arrangement in order to prioritize his followers' withdrawal from partners who were hurting users. In addition to other sports partners, the NBA's Golden State Warriors have decided to terminate the multi-year arrangement, which has a $10 million price tag. It made the announcement that it would no longer promote or advertise the FTX exchange.

Team SoloMid (TSM) informed everyone that the $210 million, 10-year-deal would no longer be going forward. It announced that the FTX branding will be removed from all social media sites as well as jerseys. The University of California, Berkeley's athletics department severed ties with FTX, bringing an end to the $17.5 million sponsorship.

The decision made by Major League Baseball to remove the FTX patch and the decision made by Riot Games to discontinue their sponsorship of the League of Legends Championships both add to the list of sports partners that have suspended their marketing obligations.

The Importance of Athlete Endorsements

As a result of their participation in sponsoring the FTX exchange, Steph Cury and a number of other prominent athletes, such as Naomi Osaka, Tom Brady, and Shohei, were included into the class action lawsuit. It is probable that Monumental Sports and Entertainment's Washington-based clubs, such as the Capitals, Mystics, and Wizards, will cancel the arrangements because of the worries of contagion that have been witnessed as FTX partners have suffered reputational harm.