Sports fans who view their favorite players as role models might think twice before taking their financial advice, too.
The bankruptcy of FTX and the arrest of its founder and former CEO are raising new questions about the role celebrity athletes such as Tom Brady, Steph Curry, Naomi Osaka and others played in lending legitimacy to the largely unregulated landscape of crypto, while also reframing the conversation about just how costly blind loyalty to favorite players or teams can be for the average fan.
Cryptocurrencies are digital money that use blockchain as the database for recording transactions. It isn’t backed by any government or institution and it remains a confusing concept — one that at first was largely the niche of tech-savvy coding specialists, people who distrusted governments and centralized banking systems and speculators with money to risk.
But now that risk is increasingly being taken on by investors who can’t afford to lose, and the disparity in wealth between celebrities and their fans creates an ethical dilemma: Should sports stars, or teams, or leagues, be touting products that could lead their fans to financial harm? Or should fans bear the responsibility for their own risky behavior regardless of who is encouraging 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 due diligence was paid to the decision, but it does call to mind a Warren Buffet quote: ‘Be fearful when others are greedy and greedy when others are fearful.’”
The marriage between crypto and sports formed a few years ago and has only strengthened since, despite all the troubles plaguing the industry. A study by the IEG sponsorship group, for instance, found FTX and other crypto companies had spent $130 million for sponsorship in the NBA alone over the 2021-22 season; the season before, the sum was less than $2 million.
FTX itself had numerous ties to sports before its eventual collapse: The company paid an undisclosed amount to place patches on the uniforms of MLB umpires, $135 million for the naming rights on the arena where the Miami Heat play, and another $10 million to Curry’s basketball team, the Golden State Warriors, for ad placement in its arena and throughout the Warriors organization.
While those deals, as well as some others, cratered when FTX declared bankruptcy, plenty more live on. They include the naming rights for the home of the Lakers, which was once known as the Staples Center, but is now known as Crypto.com Arena, at the reported cost of $700 million over 20 years. There are crypto deals in cricket, soccer and Formula 1.
Separately, dozens of athletes have endorsed crypto, and in doing so, have led some of their fans to follow suit — and others to file suit, against the likes of Curry, Brady and other high-profile personalities for using 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 uncomfortably surprised at the sudden increase of crypto-related signage around his favorite teams.
“It’s a very odd transition, especially because I don’t know if the world was ready for the prominence of crypto,” Salus said. “You’re getting these big personalities backing a thing that they, or their teams, know something about, but not very much.”
The debate has become even more complex over the past five years, with the intersection between crypto, digitized artwork offered in the form of non-fungible tokens (NFTs), legalized sports wagering and e-gaming, along with the ever-expanding virtual-reality Metaverse — all growing more popular among large factions 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’s a lot more crossover from the crypto world to the gambling world and into gaming, because when you spend on one of these Metaverse games, you’re essentially gambling since you don’t know whether the value of that asset you’ve purchased is going to go up or down.”
Crypto’s move into the public mainstream wasn’t driven by sports, but as it became a better-known commodity, sports leagues and teams and their athletes — never shy about trying to make a buck off the latest trends — got into the act.
“A lot of endorsements have to do with an emotional attachment,” said Brandon Brown, who teaches sports and business at New York University’s Tisch Institute for Global Sport. “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 along with that partnership.”
One key moment came in 2020 when a few players, including Carolina Panthers Pro Bowl lineman Russell Okung, announced they would take all or some of their multimillion-dollar salaries in crypto.
“So many purchase Bitcoin to become cash rich,” Okung tweeted not long after the announcement. “I bought it to be free from cash.” Not long after, Bitcoin.com proudly stated that the increases in the price of Bitcoin had essentially doubled the $6.5 million portion of Okung’s salary that was paid in crypto.
Bigger names followed. Actors Matt Damon and Larry David were among the Hollywood types. The mayors of New York and Miami made a splash when they, too, said they would take their pay in crypto.
Aaron Rodgers, Shaquille O’Neal, Beckham Jr. and Trevor Lawrence were among a large group of high-profile athletes who also got into the act. One popular commercial involved Tampa Bay Buccaneers quarterback Brady and his then-wife, Gisele Bündchen, calling friends to talk crypto and playfully asking them: “Are you in?”
The relationship between crypto and sports is also regenerating a debate about how athletes should use the platform they wouldn’t otherwise have but for sports. Colin Kaepernick’s kneeling, to say nothing of the racial tensions laid bare in the U.S. by George Floyd’s killing in 2020, upended the old “shut up and play” cliché, and presented many athletes with an opening to use sports to send a message.
Curry is among those who has been unafraid 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 about their views unfiltered by traditional media.
Now, Curry is in the headlines again as one of many paid endorsers of FTX. But aside of being named in the class action lawsuit and being ridiculed on some social media sites that are heavily engaged in crypto discussions, there hasn’t been any major blowback against Curry for his investments and endorsements — and there may never be.
“When the currency blows up, will people look poorly on the currency, or will people look poorly on Brady or Steph Curry?” Brown said. “I’d venture to say that people are likely to have such a strong connection with their sports figures that they’ll latch onto said sports figure and blame the other party, which in this case is FTX, or the currency.”