Proactive Investors - Riot Games, US developer of the immensely popular online multiplayer video game League of Legends, is suffering a reputational hit following the collapse of cryptocurrency exchange FTX.
Riot Games and FTX initially signed a seven-year agreement on August 2021 by which FTX marketing materials would be displayed in Riot’s League of Legends Championship esports series.
FTX has paid Riot half of its US$12.5mln obligation for the 2022 calendar year, and the first quarterly instalment 2023’s balance is due in January.
But Riot wants to wipe its hands of any further association with the failed company, which is now run by restructuring lawyer John J. Ray III, in order to pursue other sponsorship deals.
Per the agreement, Riot is prohibited from selling sponsorship rights to other partners and is prevented from commercialising the crypto exchange sponsorship category as well as the broadcast assets currently owned by FTX.
According to the motion, “since the public unravelling of FTX, Riot has faced significant non-monetary and monetary damage as a result of its ongoing association with FTX”.
“There is simply no way for FTX to cure the reputational harm already caused to Riot as a result of the highly public disrepute wrought by the debacle preceding FTX’s bankruptcy filing. FTX cannot turn back the clock and undo the damage inflicted on Riot in the wake of its collapse,” reads the document.
Former FTX head Sam Bankman-Fried (SBF) is infamously addicted to League of Legends.
In one classic instance, SBF allegedly played a round of the game while pitching FTX to partners at venture capital firm Sequoia.
Sequoia recounted the incident in a doting September article breathlessly titled “The founder of FTX lives his life by a calculus of altruistic impact”.
In the article, Ramnik Arora, FTX’s head of product development, was cited as saying: “I sit ten feet from him, and I walked over, thinking, oh, shit, that was really good,” referring to the pitch, before adding: “And it turns out that that fucker was playing League of Legends through the entire meeting.”
As an aside, Sequoia has since deleted that 133,000-word feature, which in turn called SBF a “future trillionaire” and the success of FTX a “foregone conclusion”, though it is still available via the Wayback Machine.
Whether Bankman-Fried will have access to League of Legends while awaiting trial in the US is unclear.