Riot Games, the video game company best known for creating League of Legends, has filed a petition in Delaware bankruptcy court to terminate its exclusive agreement with FTX. According to reports, FTX will owe Riot Games $10 million as of January 2023, a sum that is expected to increase over time.
Riot Games tainted by FTX
Riot Games, the company behind League of Legends, one of the world’s most popular video games, is looking to end its partnership with bankrupt FTX.
The partnership, established in August 2021, was to run for seven years and would allow FTX to brand the League of Legends Championship Series (LCS) in North America. FTX had secured a prominent place to promote its services, with the company enjoying exclusive crypto sponsor status with Riot Games.
According to the document filed in the Delaware bankruptcy court by Riot Games on Friday, the video game company said it suffered “severe reputational harm”, particularly as the sponsor was quite public and was reported by various high-profile media outlets.
Riot Games also said it was financially impacted by the various media coverage:
Since the FTX public debacle, Riot has suffered significant non-monetary and monetary damages as a result of its continued association with FTX. […] The agreement with FTX represents the largest sponsorship deal Riot has ever signed for an esports league. […] . Before and during this media storm, Riot’s image and reputation with its customers remained inextricably linked to FTX through its former CEO, Mr. Bankman-Fried. “
Also according to the court document, FTX allegedly failed to pay amounts already due in 2022:
“As noted above, FTX failed to pay $6.25 million in 2022. […] Indeed, FTX has not even attempted to respond to Riot’s multiple attempts to contact it regarding existing defaults on payments to FTX. “
Also, under the terms of the agreement, FTX still owes Riot Games several tens of millions of dollars, given the length of the partnership:
For 2023, FTX owes Riot $12.875 million, which is due on a quarterly basis at the beginning of each quarter. FTX will therefore owe an additional $3.218 million on the first business day of January 2023. Again, FTX has provided no assurance of its willingness or even ability to pay. Tens of millions of additional dollars will be due under the agreement for the remainder of the term of the agreement through 2028. “
SBF known for its affinity for the game League of Legends
Sam Bankman-Fried was known to be a regular League of Legends player, himself having said in the past that it was a way to “clear his head”:
8) On League of Legends:
I play a lot more than you’d expect from someone who routinely trades off sleep vs work.
Why?
Well, there’s one answer, which is the obvious one. The single most universal thing about LoL is that everyone who plays it says they wish they didn’t.
– SBF (@SBF_FTX) February 4, 2021
An affinity that Riot Games did not fail to mention in its filing last Friday:
” Media and Twitter commentators have been sharing images of Mr. Bankman-Fried playing League of Legends at the same time FTX was crashing. He is well known among investors for playing League of Legends during meetings. “
Team SoloMid (TSM), a core team in the U.S. League of Legends competitions, had also ended its own partnership with FTX in mid-November.
