The world's biggest esports company is 'consulting legal counsel' over FTX bankruptcy
TSM signed a $210 million sponsorship deal with cryptocurrency exchange FTX in 2021.
Team SoloMid, one of the most successful esports organizations in operation, is better known as TSM. But it's officially known as TSM FTX, thanks to a $210 million naming rights deal signed in 2021 with massive cryptocurrency exchange FTX—and yes, that's the same FTX that collapsed into bankruptcy last week.
The terms of FTX's sponsorship deal called for it to pay $21 million per year to TSM for 10 years, according to a New York Times report, a major deal on par with stadium sponsorships in conventional sports. "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," former FTX CEO Sam Bankman-Fried said at the time.
More recently, however, Bankman-Fried has been singing a different tune about what crypto is doing to investing and finance, as FTX's failure has brought the exchange under intense regulatory scrutiny. After initially copping to some degree of responsibility for the mess, he resigned as FTX CEO; he was later reported to be hauling ass to Argentina on a private jet, although he told Reuters he was actually in the Bahamas, where FTX is based; there are also rumors that he could be looking to flee to Dubai.
The whole thing is a wall-to-wall shmozzle, in other words, and it's left countless individuals and organizations scrambling to recover, or at least find their footing amidst the rubble. TSM is in a relatively good place as these things go—the company said it remains "stable and profitable"—but there's still a long-term deal in place, and an awful lot of money unaccounted for, that needs to be dealt with.
TSM Statement on FTX pic.twitter.com/nbiCCnciNFNovember 13, 2022
"Along with the rest of the world, TSM has been closely following the situation surrounding FTX," the org tweeted. "We have no insight into the matter other than what has been reported publicly. We are currently consulting legal counsel to determine the next best 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 financing won't likely damage TSM too much over the long run. The organization is a big one, fielding more than a dozen teams across games including Dota 2, League of Legends, Valorant, Apex Legends, Fortnite, and Teamfight Tactics, and was valued at $540 million in a 2022 Forbes ranking, making it the most valuable esports company currently in operation.
For now, the org doesn't appear to be moving too quickly to disassociate from FTX: The team's website still refers to it as TSM FTX, although contractual obligations presumably prevent it from dropping the name.