Riot Games, the Maker of League of Legends, wants to end its exclusive sponsorship deal with FTX following the scandals surrounding the exchange's demise.
Specifically, Riot Games said it had suffered serious reputational damage due to its "cheek cord" with FTX. League of Legends game maker has asked the court to consider the case of the company and FTX, making a request to force FTX to terminate the contract. If FTX does not agree, Riot Games will unilaterally end the agreement.
However, this requirement will cost Riot Games. In August 2021, FTX became the exclusive crypto partner of Riot Games, specifically the League of North America (LCS), the FTX logo now appears in all matches under the framework of the LCS. According to Riot, the sponsorship deal will span 7 years.
This means that Riot Games will have to compensate $ 12 million / year for 7 years if unilaterally canceling the contract. The company was expected to raise $12.5 million this year from the deal, but was in arrears of more than $6 million after the collapse. The conclusion of the agreement with FTX will allow Riot to seek a new partner and continue as an exclusive sponsor.
Riot Games said in a filing with the U.S. Bankruptcy Court for the District of Delaware on Dec. 16:
"There is simply no way for FTX to repair the reputational damage done to Riot, as a result of unauthorized actions that have been made public. FTX cannot go back in time nor compensate for the damage done to Riot after the crash."
League of Legends is former FTX CEO Sam Bankman-Fried's favorite game. There are rumors that he has even played and participated in interviews in front of the media or fundraising meetings. Even when FTX was in crisis, SBF was still playing games on Twitter.
8) On League of Legends:
I play a lot more than you'd expect from someone who routinely trades off sleep vs work. Why? Well, there's one answer, which is the obvious one. The single most universal thing about LoL is that everyone who plays it says they wish they didn't. — SBF (@SBF_FTX) February 4, 2021
However, the former FTX CEO is not a good player when after more than 1,000 matches, the highest ranking he achieved is only Copper II.
In mid-2021, Sam Bankman-Fried's FTX also spent $ 210 million to sign a sponsorship deal with TSM, one of the largest esports teams in North America and extremely popular with League of Legends. However, after the collapse of FTX, TSM announced the termination of its contract with FTX, along with many other sports organizations.
Sam Bankman-Fried was arrested in the Bahamas earlier this week and denied bail pending extradition to the U.S., where he remains in custody until February 8, 2023. Sam faces a slew of fraud charges from authorities such as the U.S. Department of Justice, the SEC and the CFTC. If convicted on all counts, Sam Bankman-Fried faces up to 115 years in prison.