Sports fans who look to their favorite players as role models may think twice before taking financial advice.
At bankruptcy of FTX with the arrest of the founder and former CEO raises new questions about the role that celebrity athletes such as Tom Brady, Steph Curry, Naomi Osaka and others play in giving legitimacy to the largely unregulated crypto landscape, while also changing the conversation about how blind loyalty is expensive for favorite players or teams. so for the average fan.
Cryptocurrencies is a digital money that uses blockchain as a database to record transactions. It is not supported by any government or institution and remains a confusing concept – which was initially mostly tech-savvy coding specialists, people who did not trust the government and centralized banking system and risk-taking speculators.
But now the risk is increasingly taken by investors who can’t lose, and the wealth gap between celebrities and fans creates an ethical dilemma: Should a sports star, or a team, or a league, become a product that can lead. fans for financial harm? Or should fans be responsible for their own risky behavior regardless of who encourages it?
“In retrospect, it was an unwise business association that put Curry and Brady together with bad company,” Mark Pritchard, a professor at Central Washington who has studied the intersection of ethics and sports, said in an email to The Associated Press. “Not sure how much persistence paid for that decision, but it reminds me of Warren Buffet’s quote: ‘Don’t be afraid when others are greedy and be greedy when others are afraid.’
The marriage between crypto and sports was formed a few years ago and has only strengthened since then, despite all the problems that plague the industry. A study by the IEG sponsor group, for example, it was found that FTX and other crypto companies have spent $130 million to sponsor the NBA alone in the 2021-22 season; the previous season, the amount was less than $2 million.
FTX itself had many ties to sports before its eventual collapse: The company paid an undisclosed amount to put patches on MLB referee 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, for advertising placement in the arena and throughout the Warriors organization.
When the offer, well some others, cratered when FTX declared bankruptcy, many others live on. This includes the naming rights to the home of the Lakers, formerly known as the Staples Center, but now known as the Crypto.com Arena, at a reported cost of $700 million over 20 years. There are crypto deals in cricket, football and Formula 1.
On their own, dozens of athletes have endorsed crypto, and in doing so, have led some fans to follow suit – and more. suit filetold people like Curry, Brady and other high-profile personalities to use their celebrity status to promote FTX’s failed business model.
Ben Salus, a Philly sports fan who has lost money in crypto, said he was surprised by the increase in crypto-related signage around his favorite team.
“It was a very strange transition, mainly because I didn’t know that the world was ready for crypto excellence,” Salus said. “You get a big personality who supports something that he, or the team, knows about, but not very much.”
The debate has become more complex in the last five years, with the intersection between crypto, digital artworks offered in the form of non-fungible tokens (NFT), legal sports wagering and e-games, together with the ever-growing virtual reality – the Metaverse – all becoming more popular among a large faction of sports stars and fans alike.
“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. “And there is more crossover from the world of crypto to the world of gambling and to the game, because when you spend in one of these Metaverse games, you are really gambling because you do not know what the value of the asset you have is going to go up or down.”
Crypto’s move into the general mainstream isn’t driven by sports, but as it becomes a more recognizable commodity, sports leagues and teams and athletes – never shy to pursue the latest trends – are taking action.
“A lot of endorsements have to do with emotional attachment,” said 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 sports teams or sports celebrities because there is an emotional attachment that goes with that partnership.”
One important moment came in 2020 when several players, including Carolina Panthers Pro Bowl lineman Russell Okung, announced that they would take all or some of their multimillion-dollar salaries in crypto.
“So many are buying Bitcoin to be cash rich,” Okung tweeted shortly after the announcement. “I bought it to be free of cash.” Not long ago, Bitcoin.com proudly announced that the rise in the price of Bitcoin had actually doubled the $6.5 million portion of Okung’s salary paid in crypto.
Bigger names followed. Actors Matt Damon and Larry David are Hollywood types. At the mayor of New York and Miami made a splash when they, too, said they would take payment in crypto.
Aaron Rodgers, Shaquille O’Neal, Beckham Jr. and Trevor Lawrence were among a large group of high-profile athletes who also took to the action. One of the popular commercials involved Tampa Bay Buccaneers quarterback Brady and his wife, Gisele Bündchen, calling friends to chat crypto and playfully asking: “Are you in?”
The relationship between crypto and sports also creates a debate about how athletes should use platforms that would not exist but for sports. Colin Kaepernick kneeling, to say something about the racial tension that was announced in the US by the killing of George Floyd in 2020, raised the old “shut up and play” cliché, and gave many athletes an opening to use sports to send a message.
Curry is one of those people who isn’t afraid to delve into some of society’s tougher topics, speaking out after Floyd’s death and contributing to the Players’ Tribune website where athletes blog about views unfiltered by traditional media.
Now, Curry is making headlines again as one of FTX’s many paid endorsers. But aside from being named in a class-action lawsuit and ridiculed on several social media sites heavily involved in crypto discussions, there hasn’t been a big outcry against Curry for his investments and endorsements — and there probably won’t be.
“When the currency explodes, will people look down on the currency, or will people look down on Brady or Steph Curry?” Brown said. “I would say that people can have a strong relationship with a sports figure that they will associate with that 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.
