Riot Games takes FTX to court for alleged ‘reputational harm’, seeks to end seven-year sponsorship deal

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According to a release from DotEsports, Riot Games has submitted a motion to compel on Friday (December 16) in the United States Bankruptcy Court in relation with severing its sponsorship agreement with the cryptocurrency exchange FTX for the League of Legends Championship Series (LCS).

This comes after the widely reported collapse of FTX and arrest of the founder Sam Bankman-Fried on fraud-related charges. Riot has requested the dissolution of their seven-year partnership with FTX after just one year into their agreement.

“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,” stated the court documents.

The motion also describes FTX founder Sam Bankman-Fried as “reckless and juvenile” after reports of him playing League games surfaced while the company was collapsing.

According to a release from CoinDesk, Riot and FTX collaborated in August 2021 when the League of Legends developer announced FTX as the official cryptocurrency sponsor of the LCS. It was deemed as the largest sponsorship agreement Riot had signed for an esports league.

The motion states that FTX has already given Riot half of what it owes them for the calendar year 2022. This year, FTX owes Riot $12,500,000 in total. According to their contract, FTX will owe Riot extra money the following year, with the first payment due on January 3, 2023.

The seven-year sponsorship agreement between Riot and FTX included extensive FTX branding during LCS competitions. According to a statement found by independent cryptocurrency writer and reporter Molly White, the collaboration was expected to bring in roughly $96 million for Riot overall.

Riot’s motion to terminate the contract with FTX has a hearing date of January 11, 2023.