The conversation started with a direct message on
Twitter from
one 29-year-old entrepreneur to another: “Yo, what’s up?” It ended with one of
the more lucrative naming rights deals in recent sports history.
اضافة اعلان
On Friday, TSM, a competitive video game organization based in
Los Angeles, announced that it was changing its name to TSM FTX — and getting
paid $210 million over 10 years in the process. FTX, an up-and-coming Hong
Kong-based cryptocurrency exchange, will foot the bill.
The annual $21 million payment is larger than many deals
corporations have struck with traditional sports teams in recent decades to
have their names attached to stadiums and arenas. It is similar to recent
transactions like Citibank’s deal with the New York Mets ($21 million per
year), MetLife’s contract with the New York Giants and New York Jets (about $19
million per year) and the British bank Barclays’ agreement with the Brooklyn
Nets ($20 million per year).
Of course, the big difference here is that TSM is changing its
actual name — the equivalent of the New England Patriots, who play in Gillette
Stadium, rebranding as the New England Patriots Gillettes.
The agreement between the two companies comes as both
cryptocurrencies and gaming have taken on new relevance during the coronavirus
pandemic, with people stuck at home searching for online entertainment and ways
to invest and make money, sometimes in unconventional (and risky) ways.
Interest in video games has increased significantly over the past year —
including in esports, where some professional players make millions of dollars
and vie for championships in leagues devoted to games like Fortnite and League
of Legends. More than 57 million people in North America watched an esports
event in 2020, according to Newzoo, a gaming analytics firm.
The value of cryptocurrencies like Bitcoin have also skyrocketed
in the last few months; even with a recent downturn, one Bitcoin was worth more
than $36,000 Thursday, up from just under $10,000 a year ago. That has led to
tremendous business for cryptocurrency exchanges, which help consumers buy and
sell digital currencies through a so-called digital wallet, taking a cut of
each sale.
Sam Bankman-Fried, chief executive of FTX, which stands for
Futures Exchange, said he quickly saw the parallels between his company and TSM
after a series of Twitter messages with Andy Dinh, a TSM founder and chief
executive.
“Taking a huge industry and then reimagining it in a digital
age: That’s sort of what esports are to sports, and it’s sort of what crypto is
to investing and to finance,” Bankman-Fried said.
TSM, which was originally known as Team SoloMid before switching
to its three-letter abbreviation, fields teams in more than 10 different video
game leagues and was valued by Forbes last year at $410 million — making it the
most valuable esports company in the United States.
Dinh said he initially reached out to Bankman-Fried intending to
invest in FTX, but the naming deal quickly came together. He said the money
would go toward attracting star players with better salaries and putting
together teams in more esports leagues. TSM, Dinh said, would also open offices
in China, Europe and South America.
“It gives us a strong foothold to really grow our brand
globally,” Dinh said. “We want to truly be a global esports team. We have to
invest in having bases in multiple places.”
For FTX, the deal gives the cryptocurrency exchange greater recognition
in the United States, where it operates a small platform. Earlier this year,
FTX signed a deal with the Miami Heat and Miami-Dade County, Florida, for $135
million over 19 years to secure the naming rights to the arena where the
basketball team plays. By working with TSM, Bankman-Fried said he hoped that
the crypto exchange, which launched in 2019, would become familiar to more
Americans and make them more comfortable with doing business with the exchange.
FTX is currently raising money that would value it at $20
billion, he said.
The majority of FTX’s sales happen outside the United States,
where FTX allows people to buy and sell what are known as tokenized stocks and
crypto derivatives — essentially, bets on the future value of currencies like
Bitcoin as well as wagers on other future political and financial possibilities.
Such bets are relatively new, largely unregulated and can be
risky, so they are generally not offered by US cryptocurrency exchanges or
legal US sportsbooks (some casinos outside the United States allow gambling on
elections). FTX’s US operation only offers traditional cryptocurrency trading.
Friday’s deal, the two chief executives said, was just the
beginning of their companies’ partnership.
“TSM could potentially have a larger and brighter future than
just what this means today,” Dinh said.
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