Riot Games is trying to get out of a terrible FTX sponsorship deal
Back in August 2021, Riot Games—developer of League of Legends—signed a funding agreement worth tens of millions of dollars with crypto exchange FTX. You know, the exchange is now bankrupt, with its founder arrested and facing serious fraud and money laundering charges.
Like Web3 is getting great Report by Molly White, the agreement is said to be in effect for seven years and involves FTX making “substantial payments” to Riot, starting with $12.5 million for calendar year 2022 (and increasing to 12,875 dollars for 2023, etc.). So far, only $6.25 million of that 2022 money has been paid out, and it’s almost impossible that Riot will see another dime, so the company filed a lawsuit in Bankruptcy Court. in Delaware to seek to cancel the remainder of the sponsorship agreement.
In terms of serious business, that’s completely understandable. As Riot pointed out in their filing, FTX has filed for bankruptcy, which would throw the entire deal straight into the trash without question. Just in case anyone do Ask the question, however, Riot added that “there is simply no way FTX can remedy the reputational damage caused to Riot as a result of the public bad reputation caused by the failure of the company.” failed before FTX filed for bankruptcy. FTX cannot go back in time and undo the damage done to Riot after its demise.”
Basically, Riot argues that FTX’s reputation has been completely ruined in the past few weeks to the point where even remotely related to the failed exchange is harming Riot. To bow to the whole thing, Riot then brought up the fact that FTX Disgraced ex-boss Sam Bankman-Fried became notorious for playing Riot games League of Legends in business meetings:
Prior to and throughout this media storm, Riot’s image and reputation among its customer base, remained closely tied to FTX through its former CEO, Mr. Bankman-Fried. The media and Twitter commentators posted images of Mr. Bankman-Fried playing League of Legends—the Riot Games game—at the same time as FTX crashed. Mr. BankmanFried is known as a game enthusiast. He’s popular among investors who play League of Legends in meetings. He admitted on Twitter that he played “a lot” [League of Legends] more than you would expect from someone who frequently trades sleep and work.” Even Mr Bankman-Fried’s ranking in League of Legends has been the subject of online commentary with public figures Alexandria Ocasio-Cortez and Elon Musk.
Even if this deal is first signed, in August 2021, it’s clear what the end game for this whole scam will be, whether it’s a video game developer or a developer. NBA team or Celebrities are too eager.
You would think Riot would know this, especially now in the middle all thisbut another part of the record argues that the FTX deal needs to be terminated because it prevents them from going any further “commercialization of a crypto exchange funding portfolio…now owned by FTX”. Fool me once, shame on you, etc