American video game developer and creator of League of Legends, Riot Games reported to seek termination of sponsorship with FTX. The company attested that following the collapse of crypto exchange, the exclusive sponsorship agreement needed to be discontinued. Beleaguered crypto exchange Sam Bankman-Fried filed for bankruptcy in November 2022.
Company Asking to Cancel the Deal
Riot Games reported to file on Friday in the United States Bankruptcy Court for the District Delaware. It noted that given its connection with the FTX, the company had to face harsh reputation harm. The game developer asked the court supervising the bankruptcy proceedings of exchange to force it to end the contract. Or else, in case of FTX’s refusal, Riot sought permission to abolish the agreement.
Noteworthy is that FTX was the exclusive sponsor of League of Legends and the deal filed in August last year permitted the exchange to display its branding during the online game’s seasons tournament. The sponsorship deal was for seven years.
Now when the company is asking for termination of sponsorship, it means that it would face the canceling of the ‘12 million USD per year’ deal. This year itself, Riot was expected to receive 12.5 million USD but following the bankruptcy filing of FTX, about half of the amount got stuck.
Money isn’t the Concern
Still when it is seeking to cancel the sponsorship deal indicates that the money is not the concern here. From the arguments, it could be inferred that the reputation and brand image is the priority for the game developer. In addition, once the deal with FTX would get canceled, the company could have got other crypto companies as sponsors.
In the filing, it noted that FTX could not cure the damage or harm to the reputation of the company as it went through a heavy disgrace publicly following the bankruptcy filing of crypto exchange. It could not turn the clock back and undone the damage that the game developer went through.
Sam Bankman-Fried’s Affection for ‘League of Legends’
In addition to the sponsorship deal, Riot Games have issues with FTX founder’s connection with the game. Bankman-Fried was reported to play ‘League of Legends’ even during the media interviews and even during a meeting of a venture capital funding round. People had different points of view regarding this, from calling it his confidence to arrogance.
However, the connection of SBF to the famous game is a concern for the company. In the court filing, it noted that media outlets and commentators on Twitter showcased the images of FTX former CEO playing the game created by Riot Games, indicating that FTX was collapsing at the same time.
