- Binance stunned the crypto world with a deal to buy Sam Bankman-Fried's crypto exchange FTX Tuesday.
- FTX made an aggressive push into sports sponsorship last year to build brand awareness.
FTX's rescue by Binance could end up having a knock-on effect for high-profile sports names, including the Miami Heat, Mercedes' Formula 1 team and legendary NFL quarterback Tom Brady.
In a stunning turn of events, FTX's CEO Sam Bankman-Fried said Tuesday the crypto exchange had entered into a transaction to be acquired by rival Binance – less than a year after his company was valued at $32 billion in a fundraising round.
He wrote on Twitter that "all assets will be covered" in Binance's takeover deal. But FTX is yet to comment on what will happen with the million-dollar sports sponsorship deals it brokered earlier this year.
FTX agreed a $135 million deal for the naming rights to the Miami Heat basketball team's home arena in May last year. Then in June, it sealed a long-term partnership deal with Brady and his then-wife Gisele Bündchen that made them FTX stakeholders and included a $20 million ad campaign.
The same month, it landed NBA star Steph Curry as a brand ambassador and shareholder. It also signed up Mercedes' Formula 1 racing team and Major League Baseball as crypto companies piled into the sports advertising market.
As cryptocurrencies surged, major exchanges like Binance, Coinbase and FTX all worked to land major sports sponsorship deals to compete for users and build brand awareness.
"It became pretty clear pretty soon that if we were going to compete for that type of retail investor, that we really needed to do a lot to get our brand out there, to build brand awareness," FTX's head of marketing Nathaniel Whittemore told Insider in May.
"And so it naturally followed from that, leaning on really big partnerships that could help supercharge that brand awareness really quickly."
But 2022 has marked a so-called "crypto winter" for the price of digital currencies, with bitcoin crashing 62% this year to trade at just over $17,000 at last check Wednesday.
Major companies have pulled away from sports sponsorship deals amid the market turmoil. FTX itself backed out of a deal to provide jersey patches to the MLB's Los Angeles Angels back in June, the New York Post reported.
FTX did not immediately respond to an Insider request for comment about how the takeover would affect its existing sports sponsorship agreements.