Esports organization Team SoloMid (TSM) has suspended its $210 million sponsorship deal with the defunct FTX crypto exchange
Following the shocking collapse of the cryptocurrency trading platform last week, professional esports organization Team SoloMid (TSM) (formerly TSM FTX) has suspended its $210 million sponsorship agreement with the defunct FTX crypto exchange “effective immediately.”
The news was made by the American esports group in a tweet to its 2.2 million followers on November 16. It said that the choice had been taken after “watching the evolving scenario and discussing internally.”
The esports company stated at the time of the $210 million purchase that it would deploy its new resources to all corners of the world by opening offices in Asia, Europe, and South America. The $210 million contract was signed in June 2021, which led to the renaming of TSM to TSM FTX.
Additionally, TSM invested $1 million in FTX’s native token, FTT, which was given to users and staff.
TSM tweeted on November 13 that the company was consulting with its legal counsel in the wake of FTX’s failure last week to determine the “best next steps to safeguard our team, staff, fans, and players.”
In its most recent release, TSM stated that FTX branding would be removed from TSM’s official name, team and player social media profiles, and jerseys due to its partnership suspension with FTX, adding:
“This means that FTX branding will no longer appear on any of our org, team and player social media profiles, and will also be removed from our player jerseys.”
TSM also used the occasion to reassure its investors that, even without FTX’s backing, its balance sheet is still solid and will stay so for the foreseeable future:
“TSM is a strong, profitable and stable organization. We forecast profitability this year, next year and beyond. The current situation with FTX does not affect any part of TSM’s operating plan, which was set earlier this year.”
TSM is best recognized for its involvement in League of Legends, one of the most popular competitively played multiplayer online battle arena video games. Dota 2, Apex Legends, and Valorant are additional online games that TSM fields players for.
Following FTX’s failure, companies other than TSM also terminated significant sponsorship agreements with the company.
Miami Heat and FTX part ways professionally
The Miami Heat of the NBA went one step farther than TSM by stating on Twitter on November 12 that it was ending its partnership with FTX.
The Miami Heat also stated that they are searching for a new naming rights partner for the arena, which will officially be known as FTX Arena in March 2021 as a result of a 19-year, $135 million sponsorship deal.
After FTX declared bankruptcy on November 14, the Mercedes Formula 1 team was another sports organization to halt its sponsorship with Sam Bankman-crumbling Fried’s business.
Toto Wolff, the CEO of Mercedes’ Formula 1 team, was quoted as saying in a recent video call that while he still believes in the long-term potential of blockchain and cryptocurrency, FTX’s collapse served as a classic illustration of the various weaknesses currently present in the sector:
“This situation is very unfortunate. We considered FTX because they were one of the most credible and solid, financially sound partners that were out there.”
“Out of nowhere we can see that a crypto company can basically be on its knees and gone one week. That shows how vulnerable the sector still is,” the executive added.
However, not all sports organizations connected to FTX commercially have yet pulled the plug.
According to SportTechie, Major League Baseball (MLB) is currently debating the appropriate course of action with its legal counsel.
