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

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

FTX founder Sam Bankman-Fried is being led away in custody after being arrested in the Bahamas last week
Photo: MARIO DUNCANSON (Getty Images)

Back 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 stock exchange which is now bankrupt, with the founder arrested and charged with serious fraud and money laundering.

As Web3 works just fine Molly White reports, the deal was meant to run for seven years, and involve FTX making “significant payments” to Riot, starting with $12.5 million for the 2022 calendar year (and escalating to $12,875 for 2023, and so on). So far, only $6.25 million of that 2022 sum has been paid, and there’s almost zero chance Riot will ever see another cent, so the company has filed a lawsuit in a Delaware bankruptcy court to have the remainder of the sponsorship deal voided .

In strictly business terms, it is completely understandable. As Riot points out in its filing, FTX has declared bankruptcy, which should send the entire deal straight into the trash without question. Just in case someone do question, but Riot added “there is simply no way for FTX to heal the reputational damage already caused to Riot as a result of the very public disrepute created by the debacle prior to FTX’s bankruptcy filing. FTX cannot turn back the clock and undo the damage done to Riot in the aftermath of the collapse.”

Basically, Riot claims that FTX’s reputation has been so thoroughly destroyed in recent weeks that being even remotely associated with the failed exchange causes Riot harm. To cap it all off, Riot throws in the actual FTXs Disgraced former boss Sam Bankman-Fried became notorious for playing Riot’s League of Legends during business meetings:

Before, and throughout this media storm, Riot’s image and reputation with its customer base remained inextricably linked to FTX through its former CEO, Mr. Bankman-Fried. Media and Twitter commentators splashed photos of Mr Bankman-Fried playing League of Legends – Riot Games’ game – at the same time as FTX crashed. Mr. BankmanFried is known for his affinity for the game. He is known among investors for playing League of Legends during meetings. He acknowledged on Twitter that he played “a lot more [League of Legends] than you would expect from someone who routinely alternates between sleep and work.” Even Mr Bankman-Fried’s rank in League of Legends has been the subject of online commentary with public figures Alexandria Ocasio-Cortez and Elon Musk weighing in.

Even when this deal was first signed, in August 2021, it was painfully clear what the end game of this whole scam was going to be, whether it was video game developers or NBA team or overly eager celebrities.

You’d think Riot would know this, especially now in the middle of the all of thisbut another part of the filing claims that the FTX agreement must be terminated because it prevents them from “commercialize the crypto exchange sponsorship category…currently owned by FTX”. Fool me once, shame on you etc etc.

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