Sports fans who see their favorite players as role models might want to think twice before taking their financial advice.
FTX’s bankruptcy and the arrest of its founder and former CEO raise new questions about the role that celebrity athletes like Tom Brady, Steph Curry, Naomi Osaka and others have played in lending legitimacy to the largely unregulated cryptocurrency landscape, while also reshaping the conversation about how blind loyalty to favorite players or teams can be expensive for the average fan.
Cryptocurrencies are digital money that uses blockchain as a database to record transactions. It is not backed by any government or institution and remains a confusing concept — one that was initially largely a niche of tech-savvy coding experts, people who distrusted governments and centralized banking systems, and speculators who risked money.
But now that risk is increasingly being taken 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, teams or leagues advertise products that could lead their fans to financial harm? Or should fans themselves be held accountable for their own risky behavior regardless of who instigates it?
“In hindsight, an ill-advised business association brought Curry and Brady into 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. “I’m not sure how much care went into the decision, but it reminds me of Warren Buffet’s quote: ‘Be fearful when others are greedy and greedy when others are fearful.'”
The marriage between crypto and sports was born a few years ago and has only grown stronger since then, despite all the troubles plaguing the industry. A study by sponsorship group IEG, for example, found that FTX and other crypto companies spent $130 million on NBA sponsorships alone during the 2021-22 season; the season before, the amount was less than $2 million.
FTX itself had numerous ties to sports before its eventual collapse: the company paid an undisclosed amount to put patches on MLB umpires’ uniforms, $135 million for naming rights to the arena where the Miami Heat play, and another $10 million to Curry’s basketball team, the Golden State Warriors. , to place ads in your arena and throughout the Warriors organization.
While those businesses, like some others, collapsed when FTX declared bankruptcy, many still live on. They include the naming rights to the home of the Lakers, once known as the Staples Center but now known as the Crypto.com Arena, for a reported price of $700 million over 20 years. There are crypto offers in cricket, football and Formula 1.
Separately, dozens of athletes have endorsed cryptocurrencies, prompting some of their fans to follow suit — and others to file lawsuits against Curry, Brady and other celebrities for using their celebrity status to promote FTX’s failed business model.
Ben Salus, a Philly sports fan who lost money on cryptocurrencies, said he was unpleasantly surprised by the sudden increase in cryptocurrency-related signs around his favorite teams.
“It’s a very strange transition, especially because I don’t know if the world was ready for the prominence of crypto,” Salus said. “These big personalities are endorsing something that they or their teams know a little bit about, but not very much.”
The debate has become even more complex over the past five years, with the intersection between crypto, digitized artworks offered as non-fungible tokens (NFTs), legalized sports betting and e-gaming, along with the ever-expanding virtual-reality Metaverse — increasingly popular among major factions. sports stars and fans.
“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 affairs work. “There’s a lot more crossover from the crypto world into the gambling and gaming world, because when you spend on one of these Metaverse games, you’re essentially gambling because you don’t know if the value of that asset you’ve bought is going to go up or down.”
Crypto’s move into the public mainstream wasn’t fueled by sports, but as it became a more well-known commodity, sports leagues and teams and their athletes — who are never shy about trying to cash in on the latest trends — jumped into 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 a sports team or a sports celebrity because there’s an emotional attachment that goes with that partnership.”
One key moment occurred in 2020 when several players, including Carolina Panthers Pro Bowl lineman Russell Okung, announced that they would receive all or part of their multimillion-dollar salaries in cryptocurrency.
“So many people are buying Bitcoin to get rich,” Okung tweeted shortly after the announcement. “I bought it without cash.” Not long after, Bitcoin.com proudly stated that the increase in the price of Bitcoin essentially doubled the portion of Okung’s $6.5 million salary that was paid out in cryptocurrency.
Bigger names followed. Actors Matt Damon and Larry David were among the Hollywood types. The mayors of New York and Miami caused a stir when they too said they would receive their salaries in cryptocurrency.
Aaron Rodgers, Shaquille O’Neal, Beckham Jr. and Trevor Lawrence were among a large group of top athletes who also got in on the action. One popular ad featured Tampa Bay Buccaneers quarterback Brady and his then-wife, Gisele Bündchen, calling friends to discuss crypto and jokingly asking them, “Are you in?”
The relationship between crypto and sports also renews the debate about how athletes should use a platform that they wouldn’t otherwise have except for sports. Colin Kaepernick’s kneeling, not to mention the racial tensions exposed in the US by the killing of George Floyd in 2020, turned the old cliché “shut up and play” on its head and opened up the opportunity for many athletes to use sports to send a message.
Curry is among those who haven’t been afraid to wade into some of the tougher social issues, speaking out in the wake of Floyd’s killing and contributing to the Players’ Tribune website, where athletes blog about their views unfiltered by traditional media.
Now Curry is back in the headlines as one of FTX’s many paid supporters. But aside from being named in a class-action lawsuit and ridiculed on some social media sites heavily engaged in cryptocurrency discussions, there hasn’t been any major backlash against Curry for his investments and support — and there may never be.
“When the currency blows up, are people going to look down on the currency or are people going to look down on Brady or Steph Curry?” Brown said. “I would venture to say that people are likely to have such a strong association with their sports figures that they will latch on to that sports figure and blame the other party, which in this case is FTX or the currency.”