Riot Games is trying to get out of a terrible FTX sponsorship deal

FTX founder Sam Bankman-Fried is taken into custody after being arrested in the Bahamas last week

FTX founder Sam Bankman-Fried is taken into custody after being arrested in the Bahamas last week
Photo: MARIO DUCANSON (Getty Images)

In August 2021, Riot Games, the developers of League of Legends— signed a sponsorship deal worth tens of millions of dollars with cryptocurrency exchange FTX. You know, the exchange which is now bankrupt, with its founder arrested and facing serious charges of fraud and money laundering.

As Web3 is just fine Molly White Reports, the deal was supposed to last seven years and involved FTX making “substantial payments” to Riot, starting with $12.5 million for calendar year 2022 (and rising to $12.875 for 2023, etc.) . Only $6.25 million of that 2022 sum has been paid so far, and there’s almost no chance Riot will receive a penny more, so the company has filed a lawsuit with a Delaware bankruptcy court to seek the rescission of the remainder of the sponsorship agreement.

In strictly commercial terms, this is perfectly understandable. As Riot points out in its filing, FTX has declared bankruptcy, which should send the whole thing straight to the trash can, no questions asked. Just in case someone Is ask questions, however, Riot added “there is simply no way for FTX to undo the reputational damage already done to Riot as a result of the very public disrepute caused by the debacle preceding FTX’s bankruptcy filing. FTX cannot go back and repair the damage done to Riot as a result of its collapse.

Basically, Riot claims that FTX’s reputation has been so thoroughly trashed over the past few weeks that being even remotely associated with the exchange’s failure is hurting Riot. To put an arc on the whole, Riot then adds the fact that FTX disgraced former boss Sam Bankman-Fried rose to fame for playing Riot League of Legends during business meetings:

Prior to and throughout this media storm, Riot’s image and reputation with its customer base remained inextricably tied to FTX through its former CEO, Mr. Bankman-Fried. Media outlets and Twitter commentators circulated footage of Mr. Bankman-Fried playing League of Legends, Riot Games’ game, just as FTX crashed. Mr. BankmanFried is famous for his affinity with the game. He is well known to investors for playing League of Legends at meetings. He admitted on Twitter to having played “a lot more [League of Legends] than you would expect from someone who regularly trades sleep for work. Even Mr. Bankman-Fried’s ranking in League of Legends has been the subject of online commentary with public figures like Alexandria Ocasio-Cortez and Elon Musk.

Even back when this deal was first signed, in August 2021, it was awfully clear what the end game would be for this whole scam, whether it was video game developers or NBA Teams Where impatient celebrities.

You’d think Riot would know, especially now in the midst of all thatbut another part of the case argues that the FTX deal should be terminated because it prevents them from continuing “market crypto exchange sponsorship category…currently owned by FTX”. Fool me once, shame on you, etc etc.

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