The FTX crypto exchange, which filed for bankruptcy but plans to restart operations, is now looking to recover some of the money it paid to popular celebrities and professional athletes who once promoted the platform. While notable names like Shaquille O’Neal and Naomi Osaka have been mentioned, it is interesting to note that Tom Brady’s involvement has not yet been discussed. FTX, at its peak in 2021, made several high-profile deals to acquire the naming rights of arenas and partnered with numerous celebrities and athletes to promote its brand. However, these promotions came at a cost, and now the exchange is striving to recoup some of the funds it had paid out.
During its heyday, FTX signed endorsement deals with renowned athletes such as Shaquille O’Neal, Steph Curry, and Naomi Osaka. However, Tom Brady had a distinctive approach, as he and his former wife opted to take an equity stake in the exchange. The collapse of FTX in late 2022 not only affected the company, its founders, and employees but also had far-reaching consequences for the celebrities involved. Many of them have found themselves entangled in class action lawsuits, which has tarnished their reputations and financial standings.
New Leadership and Recovery Strategy
Under the leadership of CEO John J. Ray III, the newly appointed executives at FTX are working diligently to implement strategies to recover a portion of the funds owed to the exchange’s creditors. Meanwhile, SBF, believed to be the main figure responsible for FTX’s downfall, is awaiting trial. As part of the recovery effort, FTX Group has hired financial advisors to assess the possibility of retrieving payments made to O’Neal, Osaka, and others for their promotional services over the years. These payments are categorized as “prepayments related to advertising or sponsorship deals” in court documents.
Potential Recoverable Payments
According to a report from Bloomberg, FTX has disclosed several substantial payments made to various entities in the sports industry. One notable example is the approximately $4.9 million disbursed to Major League Baseball (MLB), a partnership where umpires were required to wear patches bearing the FTX logo for a period. Additionally, the exchange revealed a sum of at least $12.2 million related to its partnership agreements with the Formula 1 racing team Mercedes-AMG Petronas. Moreover, the report states that FTX paid $3.4 million to the NBA’s Golden State Warriors and nearly $242,000 to Stephen Curry’s business, SC30 Inc.
An Uphill Battle
While FTX is determined to reclaim some of the funds it paid to celebrities and athletes, the road to recovery will undoubtedly be challenging. The bankruptcy process involves complex legal procedures and negotiations with creditors, making it difficult to predict how successful FTX will be in retrieving these payments. The company must prove that these payments can be legally classified as recoverable assets, which may require the guidance and expertise of skilled legal professionals.
FTX’s efforts to recover the payments made to high-profile individuals signify the platform’s commitment to mitigate its financial losses and restore its reputation. As the company navigates the Chapter 11 bankruptcy process, it remains to be seen how much of the funds can actually be retrieved. The outcome of the financial advisors’ review, as well as the subsequent court decisions, will ultimately determine whether FTX can succeed in its pursuit to recover the payments made to celebrities and athletes who once endorsed the platform.
FTX’s quest to retrieve payments made to celebrities and professional athletes is an interesting development in its ongoing bankruptcy proceedings. As the new leadership strategizes to recover the funds owed to creditors, FTX is exploring all possible avenues to reclaim payments made to endorsers like Shaquille O’Neal and Naomi Osaka. However, the success of this endeavor relies on multiple factors, including legal interpretations and court decisions. Only time will tell if FTX will be able to recoup a portion of the funds, as it aims to rebuild and regain its footing in the crypto exchange industry.