World’s largest esports company ‘seeks legal counsel’ on FTX bankruptcy
One of the most successful esports organizations in business, Team SoloMid is better known as TSM. But it’s officially known as TSM FTX, thanks to a $210 million naming rights deal it signed in 2021 with huge cryptocurrency exchange FTX — and yes, it’s the same FTX that’s collapsed into bankruptcy (opens in a new tab) Last week.
The terms of FTX’s sponsorship deal called for it to pay $21 million a year to TSM for 10 years, according to a New York Times. (opens in a new tab) report, a major deal on par with stadium sponsors in conventional sports. “Taking a huge industry and reimagining it in the digital age: that’s kind of what esports is for esports, and that’s kind of what crypto is for investing and funding,” said at the time former FTX CEO Sam Bankman-Fried.
More recently, however, Bankman-Fried has been singing a different tune about what crypto is doing for investing and funding, as the failure of FTX has subjected the exchange to intense regulatory scrutiny. (opens in a new tab). After initially cutting to a certain degree of responsibility for the mess (opens in a new tab), he resigned as CEO of FTX; it was later reported that he was transporting buttocks to Argentina in a private jet, although he told Reuters (opens in a new tab) he was actually in the Bahamas, where FTX is based; there are also rumors he may be looking to flee to Dubai (opens in a new tab).
In other words, the whole thing is a wall-to-wall shmozzle, and there are still countless individuals and organizations scrambling to recover, or at least find their place among the rubble. TSM is in a relatively good position as these things go – the company said it remains “stable and profitable” – but there’s still a long-term deal in place, and plenty of cash unaccounted for, which must be dealt with.
“Along with the rest of the world, TSM has been closely monitoring the situation surrounding FTX,” the organization tweeted. “We have no idea of the matter other than what has been publicly reported. We are currently consulting with legal counsel to determine the best next steps to protect our team, staff, fans and players.
“To be clear, TSM is built on a solid foundation. We are stable and profitable, and we continue to forecast profitability for this year, next year and beyond. We look forward to a great year in 2023.”
The loss of FTX funding probably won’t hurt TSM too much in the long run. The organization is large, fielding more than a dozen teams in games including Dota 2, League of Legends, Valorant, Apex Legends, Fortnite and Teamfight Tactics, and was valued at $540 million in a 2022 Forbes. (opens in a new tab) ranking, making it the most valuable esports company currently in operation.
So far, the organization doesn’t seem to be moving too fast to dissociate itself from FTX: the team’s website (opens in a new tab) still calls it TSM FTX, though contractual obligations presumably prevent it from dropping the name.