Sports fans who look up to their favorite players as role models may want to think twice before taking their financial advice.
FTX’s bankruptcy and the arrest of its founder and former CEO raise new questions about the role that celebrity athletes like Tom Brady, Steph Curry, Naomi Osaka and others have played in bringing legitimacy to the largely unregulated crypto landscape. for, while reframing a conversation about how costly blind loyalty to favorite players or teams can be for the average fan.
Cryptocurrencies are digital money that use the blockchain as a database to record transactions. It is not backed by any government or institution, and it remains a confusing concept that was initially mostly a place for tech-savvy coding professionals, people who distrusted governments and centralized banking systems, and speculators to risk money.
But now that risk is increasingly assumed by investors who can’t afford to lose, and the disparity in wealth between celebrities and their fans creates an ethical dilemma. are their fans hurting financially? Or should fans be held accountable for their risky behavior, regardless of who is encouraging it?
“In retrospect, it was a reckless business association that put Curry and Brady in bad company,” Central Washington professor Mark Pritchard, who has studied the intersection of ethics and sports, said in an email to The Associated Press. “I’m not sure how much due diligence went into the decision, but it reminds me of a Warren Buffett quote: “Be afraid when others are greedy and greedy when others are afraid.”
The marriage between crypto and sports was formed a few years ago and has only grown stronger since then, despite all the troubles plaguing the industry. For example, a study by sponsorship group IEG found that FTX and other crypto companies spent $130 million on sponsorships for the 2021-22 NBA season alone; last season the amount was less than $2 million.
FTX itself had many ties to the sport before its eventual collapse; the company paid an undisclosed amount for patches on MLB umpires’ uniforms, $135 million for naming rights to the arena where the Miami Heat play, and another $10 million for Curry’s basketball. team, the Golden State Warriors, to advertise in its arena and within the Warriors organization.
While those deals, along with some others, were halted when FTX filed for bankruptcy, many more are ongoing. Those include the naming rights to the Lakers’ home, once known as Staples Center but now known as Crypto.com Arena, worth $700 million over 20 years. There are crypto deals in cricket, football and Formula 1.
Individually, dozens of athletes have endorsed the crypto, prompting some of their fans to follow suit and others to file lawsuits against Curry, Brady and other high-profile figures for exploiting their celebrity status. FTX’s failed business model.
Ben Salus, a Philly sports fan who lost money in crypto, said he was uncomfortably surprised by the sudden surge of crypto-related signs around his favorite teams.
“It’s a very strange transition, especially because I don’t know if the world was ready for the popularity of crypto,” Salus said. “You get these big personalities supporting something that they or their teams know something about. , but not much.”
The debate has become even more complex over the past five years, with the intersection between crypto, digitized artworks offered in non-fungible tokens (NFTs), legalized sports betting and electronic gaming, and the ever-expanding virtual-reality Metaverse. all are becoming more popular among sports stars and large fan groups.
“It’s a lot more connected than people think,” said Ryan Nicklin, who studies the role of crypto in sports as part of his public relations business. , because when you spend on one of these Metaverse games, you’re essentially gambling because you don’t know if the value of that asset you’re buying is going to go up or down.”
Crypto’s move into the public mainstream wasn’t driven by sports, but as it became a more popular commodity, sports leagues and teams and their athletes, never afraid to try to cash in on the latest trends, got in on the action.
“A lot of endorsements are about emotional attachment,” says Brandon Brown, who teaches sports and business at New York University’s Tisch Institute for Global Sports. “So it would make sense for these (crypto) companies to work with a sports team or a sports celebrity because there’s an emotional attachment that goes with that partnership.”
A major moment came in 2020 when several players, including Carolina Panthers Pro Bowler Russell Okung, announced that they would take their multi-million dollar salaries in crypto.
“So many are buying bitcoin to get rich with cash,” Okung tweeted shortly after the announcement. “I bought it to be cash free.” Not long after, Bitcoin.com proudly announced that the rise in the price of Bitcoin had essentially doubled the portion of Okung’s $6.5 million salary that was paid in crypto.
Bigger names followed. Actors Matt Damon and Larry David were Hollywood types. The mayors of New York and Miami caused a stir when they also said they would take their salaries in crypto.
Aaron Rodgers, Shaquille O’Neal, Beckham Jr. and Trevor Lawrence were among a large group of high-profile athletes who also got in on the action. One famous ad featured Tampa Bay Buccaneers quarterback Brady and his then-wife Gisele Bundchen calling friends to talk crypto and playfully asking them:
The relationship between crypto and sports also creates a debate about how athletes should use a platform that they would not have otherwise, except for sports. Colin Kaepernick’s kneeling, not to mention the racial tensions that have come to light in the US with the killing of George Floyd in 2020, has upended the old “shut up and play” cliché and given many athletes a chance to use sports to send a message.
Curry is one who isn’t afraid to delve into some of society’s more difficult topics, speaking out after Floyd’s killing and contributing to the Players’ Tribune website, where athletes blog their views unfiltered by traditional media.
Now Curry is back in the headlines as one of FTX’s many paid sponsors. But aside from being included in a class-action lawsuit and ridiculed on some social media sites heavily involved in crypto-discussions, there hasn’t been any serious backlash against Curry for his contributions and endorsements, and there may never be.
“When the currency explodes, will people look bad on the currency, or will people look bad on Brady or Steph Curry?” Brown said: “I would venture to say that people are likely to have such a strong connection to their sports figures that they will latch on to said sports figure and blame the other party, which in this case is FTX or the currency.”
AP Business writer Ken Sweet contributed to this report.