financemagnates.com
Mercedes Formula 1, the international racing team of German luxury car manufacturer Mercedes-Benz, has suspended its sponsorship deal with the beleaguered Bahamas-based cryptocurrency exchange, FTX.
The news comes as FTX on Friday announced that it has filed for bankruptcy protection in the United States for the FTX Group which includes FTX.com, FTX.US, Alameda Research and over 130 affiliated companies.
In September last year, FTX signed a long-term partnership deal with the racing team. The deal covered the inclusion of the FTX logo on both cars and drivers of the racing teams as well as on other facilities. However, a team spokesperson on Friday said the team will be dropping the crypto exchange’s logo from its cars and other branded assets starting this weekend. The team will continue to closely watch how things evolve, the spokesperson added.
Sports Deals in Jeopardy?
When FTX was in good financial standing, the crypto exchange was big on crypto sports deals. In March 2021, the exchange signed a $135 million contract to purchase the naming rights of the American professional basketball team Miami Heat’s home arena.
The exchange also signed as a naming right sponsor of the American mixed martial arts Ultimate Fighting Championship for 10 years in a deal estimated at about $17.5 million deal. Additionally, FTX in July 2021, signed a five-year deal with Major League Baseball to feature patches of its logo on the league’s umpires.
Later in August, the crypto exchange secured naming rights to UC Berkeley Football Stadium in its first college sports deal. Under the 10-year deal, which was sealed at $17.5 million, the college’s football stadium was renamed “FTX Field”.
What becomes of these deals and others the troubled cryptocurrency exchange signed will likely unfold in the months ahead. However, Matt House, the CEO of SportQuake, an agency that has brokered a number of high-profile sports-sponsorship deals, told Finance Magnates during the week that there will be no immediate financial problem to rights owners if their payment terms for the current financial year were good or paid in advance.
But "they will have big problems if they weren't and are now out of pocket," House said. "Medium-term rights owners will need to scramble around and replace FTX. Most FTX sponsorship assets are blue-chip, so they will recoup in time, but in the short term it will be a hassle for sure," House added.
Meanwhile, a Miami-Dade County told Front Office Sports on Friday that it will consider legal options should FTX fail in its obligations on the deal with Miami Heat.