Riot to terminate $96 million sponsorship deal with FTX

Riot Games is seeking to terminate its League of Legends Championship Series sponsorship agreement with FTX. 

Riot Games has filed a petition in the United States Bankruptcy Court for the District of Delaware to end its LCS sponsorship deal with the cryptocurrency exchange FTX. According to a motion submitted in this case, FTX still owes Riot Games for serving as the LCS’ sponsor. Furthermore, the motion argues that it is irrational to believe that FTX can guarantee future payments in the long run.

Even though FTX is practically bankrupt, the corporation still owes Riot half of its $12.5 million payment for 2022, according to Riot’s motion. Over the course of the seven-year sponsorship agreement, which totals more than $96 million USD, the yearly payout was planned to increase. Riot Games also stated in the filing that FTX was unable to repair any harm done to the company’s reputation as a result of their shared affiliation.

 

Following the cryptocurrency exchange’s filing for bankruptcy, Riot experienced severe public humiliation. The filing by Riot is not a lawsuit against FTX directly, but rather a motion that will be reviewed and considered by the Bankruptcy Court before a hearing takes place. Riot also asked for permission to end the contract if FTX refuse to comply with it. Riot is working hard to terminate its agreement with FTX as soon as possible while simultaneously seeking a replacement for FTX before the start of the next season 

The bankruptcy of FTX left TSM and Riot in limbo

 Riot and FTX teamed up last summer when the League of Legends developer named FTX the official cryptocurrency sponsor of the LCS. Riot did not at the time make the deal’s price publicly known, although it did say that it was the biggest esports sponsorship the firm had ever received. The seven-year sponsorship agreement included FTX branding in key spots on the LCS broadcast to highlight stats including gold, the currency used in League of Legends to purchase items.

While things initially seemed to be going well, internal documents that were leaked last month revealed serious irregularities in FTX’s bookkeeping, prompting a wave of customer withdrawals. After investors withdrew $6 billion from the platform in just three days and rival exchange Binance abandoned a rescue plan, FTX filed for bankruptcy protection in Delaware in November. Millions of creditors suffered damages totaling billions of dollars as a result of the collapse. The chain of events led the esports organization TSM to suspend a $210 million naming rights deal with the bankrupt crypto exchange FTX.

Header: Riot Games