The impact of the cryptocurrency market crash is increasingly reverberating through the sports and entertainment industries. According to a report by The New York Times, American football star Tom Brady and his former spouse, renowned supermodel Gisele Bündchen, experienced a substantial financial blow following the collapse of cryptocurrency firm FTX.
The duo lost the entire value of their shares in the embattled company, once valued at a combined total of $48 million. In a high-profile move in 2021, Brady and Bündchen each inked endorsement deals with FTX, led by entrepreneur Sam Bankman-Fried.
Brady's agreement was worth a handsome $30 million, while Bündchen's was valued at $18 million. Interestingly, their compensation wasn't in traditional currency but was instead paid in company stock.
Lawsuit Looms After FTX Collapse
The former power couple, whose divorce was finalized in October 2022, now faces a lawsuit from disgruntled FTX customers seeking to reclaim their losses.
The expose by NYT's Erin Griffith and David Yaffe-Bellany details how the sudden collapse of FTX decimated the value of their contracts. In the same year that the endorsement deals were made, Brady and Bündchen actively participated in a $20 million advertising campaign for FTX.
The promotional blitz included commercials aired during NFL games and TikTok videos featuring Brady and Bankman-Fried, filmed at FTX's Bahamian headquarters. Bündchen also stepped into the role of FTX's head of environmental and social initiatives.
However, in a shocking twist, FTX's $32 billion valuation plummeted to nothing when the company went bankrupt in November 2022. As a result, Brady and Bündchen's shares, along with their small amount of Ethereum, Bitcoin, and Solana tokens, were wiped out.
Their high-profile losses shed light on a trend where prominent individuals endorsed cryptocurrency companies, many of which were key advertisers and sponsors in the sports industry in 2020 and 2021. However, the crypto bubble burst in 2022, sending shockwaves throughout the tech, media, and banking sectors.
FTX, once a shining star of the crypto world, filed for bankruptcy in December, while its founder Bankman-Fried faced arrest and multiple fraud charges. This cryptocurrency calamity also dealt a hefty blow to sports franchises and leagues.
Major League Baseball, which delved deeper into the murky waters of unregulated currency than any other sports entity, terminated its five-year agreement with FTX. Meanwhile, the Miami Heat scrambled to find a new naming rights sponsor for its arena.
The fate of the former STAPLES Center/Crypto.com Arena in Los Angeles hangs in balance, as the aftershocks of the crypto collapse continue to be felt.