How the collapse of FTX is hitting sport


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Football’s shop window is filling up. Liverpool FC are the latest club to start scouting for new investment, joining cross-city rivals Everton and Italian giants Inter Milan. Liverpool owner Fenway Sports Group, which counts the Boston Red Sox and the Pittsburgh Penguins among its other sports assets, has enlisted Goldman Sachs and Morgan Stanley to drum up interest. The process could lead to a full sale, in what would probably be the biggest football transaction yet.

It’s only been a few months since Chelsea and AC Milan set new benchmarks for football club valuations in Europe, but it feels like the mood music is shifting. Borrowing costs have jumped, while other asset classes have been hammered. Liverpool, Everton and Inter offer very different investment prospects — how conversations with potential suitors progress will tell us a lot about whether the bullish case for sport remains intact.

This week we’re looking at one of the big stories of the week — the implosion of FTX, one of the crypto world’s biggest players. What does this mean for the sport industry? Plus, we look at online sports betting, and a failed half a billion dollar gamble at the US midterms. Do read on — Josh Noble, sports editor

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How FTX exposed sport’s eagerness for crypto riches

Tom Brady: FTX ambassador © AP

What links the Miami Heat’s basketball arena, NFL star quarterback Tom Brady and the Mercedes Formula 1 team? As ever in sport, it’s a question of sponsorship. And in this case, they struck partnerships with FTX, the crypto exchange which filed for bankruptcy in the US on Friday. The group’s lightning-fast plunge raises questions, once again, about the ties between crypto and sport.

The way sport reaches millions of people around the world is the envy of just about any company. Win or lose, fans stay loyal. Imagine reaching that fan base, connecting with them, sending your brand mainstream. That’s the crux of sport sponsorship.

Led by Sam Bankman-Fried, FTX struck sports partnerships as it grew into one of the world’s biggest crypto exchanges, a key piece of infrastructure in the complex world of digital assets. FTX wasn’t alone. Crypto groups have poured money into sport. At the centre of the investment was a desire to reach beyond your average crypto geeks.

FTX’s sports partners are already being forced to take action. The Miami Heat said late on Friday it was terminating its agreement with FTX and beginning the search for a new arena naming partner. Mercedes F1 said it had suspended its relationship with FTX and that the crypto exchange’s logo will not appear on its cars at this weekend’s Brazil Grand Prix. Questions to Brady (also an FTX ambassador) went unanswered.

Another concern is that Bankman-Fried became the respectable face of crypto. He made magazine covers, carried sway in Washington and with regulators, and attracted established institutional investors to FTX’s list of shareholders. He even interviewed Bill Clinton and Tony Blair at a conference. So if FTX can implode, are there any safe bets in this volatile industry?

The wider question for sport is whether clubs and leagues have been too eager to jump into bed with crypto groups seeking legitimacy. By nature, fans typically aren’t sophisticated financial investors. Still, teams, leagues and athletes have lent their reputations to the nascent sector, publicising crypto brands to fans who risk losing big sums of cash when trading volatile assets on infrastructure open to mishap.

Now with FTX in Chapter 11 proceedings, the questions about sport and crypto are set to grow.

Busted flush: Online betting industry loses big in California

California sports betting: rejected © AP

Forget the race for Arizona governor, or the battle in Georgia to control the US Senate. The most expensive vote in this year’s midterm elections was for a pair of ballot measures in California: Proposition 26 and 27.

Proposition 26 would have legalised sports betting — as well as roulette and dice games — at the state’s tribal casinos, while 27 would have brought in online sports gambling. Backers of the measures spent $527mn to win support from voters, a signal of the potential riches on offer should the largest US state open up for them. Eilers & Krejcik Gaming, the research and consulting firm, estimated the state would have generated annual revenues of $3.1bn, making it the largest sports betting market in the US. 

Yet both measures failed dismally. With 60 per cent of the votes counted, proposition 27 — boosted by betting companies including FanDuel, DraftKings and BetMGM — is losing by a margin of more than 4-to-1 against. Proposition 26 has the support of less than a third of the electorate.

“Our internal polling has been clear and consistent for years: California voters do not support online sports betting,” said Anthony Roberts, Tribal Chairman of the Yocha Dehe Wintun Nation, part of the campaign to defeat the measures.

The failure had little impact on listed betting companies, with rejection already baked in. And these companies are faring well stateside anyway — this week Flutter upgraded its full-year revenue estimate in the US by $100mn, money that could be used to pay down debts as interest rates rise.

They could try again in two years’ time during the next general election, after all, California is too big a potential market to ignore. Peter Jackson, chief executive of FanDuel parent Flutter, told the FT’s Oliver Barnes that the result was “frustrating” but that the industry “can be patient”.

But it looks like a real long shot. Gaming analyst Adam Kreijk said: “There’s a good chance that there’s another initiative in 2024 — I don’t think they have a chance unless they try a totally new approach.”

Paul Leyland, analyst at advisory firm Regulus Partners, went even further: “The right narrative for the failure in California is to admit a colossal and predictable strategic blunder which wasted millions of dollars making the commercial sector look immature and self-interested. Only with a complete rethink based on a deep recognition of the causes of failure can the commercial sector hope for success ‘next time’.” 

He finishes: “To go again in 2024 just means covering up incompetence by wasting more precious resources that could actually be used to do some good.” 

Countdown to Qatar

Qatar World Cup: taking off © REUTERS
  • Qatar was far from the most obvious choice for this year’s World Cup. But if you want to know the real story behind how the tiny Gulf state secured the right to host the world’s most famous football tournament, look no further than FT Middle East editor Andrew England’s magazine feature.

  • Ever wondered why Real Madrid’s French striker Karim Benzema just gets better with age? Or how Lionel Messi keeps making the killer pass? Simon Kuper has the answers in his column about why the most effective players heading to the World Cup are in their mid-to-late 30s.

  • What does it take to win the World Cup? We speak to seven past winners — including Kylian Mbappe and Gerard Piqué — to get their tips and their memories from victories past.


  • The Saudi Arabia-led owners of Newcastle United have injected a further £70mn into the English Premier League club, taking their total investment to nearly half a billion pounds including the £305mn acquisition price.

  • Derivatives traders dressed as Super Mario and insurance brokers in Hawaiian shirts are rejoicing. But the return of the Hong Kong Sevens rugby tournament this weekend means more than just fancy dress. It’s a question of whether sport signals Hong Kong’s rejuvenation as a financial hub after strict Covid lockdowns damaged its standing on the global stage.

Transfer Market

Bjørn Gulden: new crosstown gig © Evan Agostini/Invision/AP
  • Adidas has hired a new chief executive in Bjørn Gulden, the Norwegian industry veteran will join the company in the new year from crosstown rival Puma. The appointment ends a long search for troubled Adidas, which issued its third profit warning in five months last week following its dissociation from Ye, the rapper and designer formerly known as Kanye West. Gulden, a former professional footballer who worked at Adidas in the 1990s before rising through the ranks at Puma, replaces outgoing Kasper Rørsted who led the sportswear company from 2016. Both Adidas and Puma were founded in tiny Herzogenaurach, Germany by brothers Adi and Rudolf Dassler.

  • Giorgio Furlani has been appointed the next chief executive of AC Milan, succeeding Ivan Gazidis. Furlani is a native Milanese who has spent his career in finance, with stints at Lehman Brothers, Apollo, and most recently at Elliott Management, which appointed him to the Rossoneri board in 2018.

Final Whistle

Sure, the US midterm elections were the story of the week in Pennsylvania, which had one of the most competitive senate races in the country. But Philadelphia had another victor this week in an individual now known as Chicken Man: he simply ate 40 whole rotisserie chickens in 40 days, before an adoring local crowd. His final meal took place the day after not one but two local pro sports teams — baseball’s Philadelphia Phillies and football’s Philadelphia Union — lost national championship titles. Hey, everybody’s gotta have a dream.

Scoreboard is written by Josh Noble, Samuel Agini and Arash Massoudi in London, Sara Germano, James Fontanella-Khan, and Anna Nicolaou in New York, with contributions from the team that produce the Due Diligence newsletter, the FT’s global network of correspondents and data visualisation team

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