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Friday, May 20, 2022

Sports teams love crypto. What happens when their sponsor strikes out?

The Nationals signed a five-year, $38.15 million deal this winter to promote Terra and received all the money up front. The internal debate, according to multiple people with knowledge of the discussions, is centered on whether the organization should honor its agreement with Terra and keep the company’s name on its luxury club behind home plate, where “Terra” is stripped across every seat, and elsewhere in the stadium.

As the fallout from Terra’s crash continues, the Nationals’ predicament highlights the potential pitfalls for athletes, teams and leagues that have tethered their brands to the volatile digital currency.

The terms of the Nationals’ contract with Terra include naming rights to its premier club, signage around Nationals Park, big-screen advertisements and continued promotion on the Nationals’ official social media accounts. In announcing what they called a “groundbreaking partnership” with Terra in February, the Nationals said Terra “has experienced a meteoric rise as a market leader through its blockchain and DeFi ecosystem.” The team called itself “leading innovator in Major League Baseball.”

But that was when TerraUSD was trading at $1. By Friday, it had fallen to less than seven cents, in what crypto market analysts call an irreversible implosion. A spokeswoman for the Nationals, whose owners are exploring a sale, declined to comment on the partnership or the ill-timed tweet. Terra did not respond to a request for comment.

RoyalsRetro (AG#1F) Posted: May 20, 2022 at 02:30 PM | 28 comment(s) Login to Bookmark
  Tags: cryptocurrencies, nationals

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   1. Pat Rapper's Delight (as quoted on MLB Network) Posted: May 20, 2022 at 03:02 PM (#6077661)
My heart truly bleeds. Perhaps the Nats could find a willing replacement "partner" in Melvin Capital, a proven global disruptor in the speculative finance ecosystem.
   2. ERROR---Jolly Old St. Nick Posted: May 20, 2022 at 03:13 PM (#6077663)
This is what can happen when you keep making deals with scam artists and flim-flam men. Anyone remember Enron Field?
   3. Walt Davis Posted: May 20, 2022 at 03:36 PM (#6077666)
If Terra had paid me $38 M upfront, I'd still be proudly wearing a Terra t-shirt today. Unless the Nats were silly enough to receive their payment in Terra, then they're just mildly embarrassed. And of course how many Nats fans even knew what Terra was when they saw the name, care at the moment or will remember in a year's time.

One of the currency exchange companies I have used recently emailed me that they've just added crypto ... good timing.
   4. snapper (history's 42nd greatest monster) Posted: May 20, 2022 at 03:39 PM (#6077667)
If Terra had paid me $38 M upfront, I'd still be proudly wearing a Terra t-shirt today. Unless the Nats were silly enough to receive their payment in Terra, then they're just mildly embarrassed. And of course how many Nats fans even knew what Terra was when they saw the name, care at the moment or will remember in a year's time.


I think you have either keep advertising, or give back some of the money. Best case is for Terra to sell its rights to someone else, and recoup some money for their creditors.
   5. Zach Posted: May 20, 2022 at 04:10 PM (#6077674)
The Nationals signed a five-year, $38.15 million deal this winter to promote Terra and received all the money up front.

Smart, Nats. Very smart. The pusher should never dip into the product.
   6. . . . . . . Posted: May 20, 2022 at 05:21 PM (#6077691)
I think you have either keep advertising, or give back some of the money. Best case is for Terra to sell its rights to someone else, and recoup some money for their creditors.


Astute analysis <eyeroll>
   7. Starring Bradley Scotchman as RMc Posted: May 20, 2022 at 06:02 PM (#6077700)
Terra comes down to earth! Film at eleven...!
   8. Tom Nawrocki Posted: May 20, 2022 at 06:50 PM (#6077707)
The umpires are wearing FTX patches on their uniforms, for a crypto exchange. Hopefully, MLB got paid upfront for that, too.
   9. Pat Rapper's Delight (as quoted on MLB Network) Posted: May 22, 2022 at 03:21 PM (#6077972)
Smart, Nats. Very smart. The pusher should never dip into the product.

Yeah, it's not so much that the sports teams "love crypto." It's that they'll gladly rent their love to anyone who will hand them an 8-figure check in return, which currently the crypto bros are doing.

Perhaps they're floating the Soto trade balloon because they got paid in BTC rather than USD.
   10. Barry`s_Lazy_Boy Posted: May 22, 2022 at 10:05 PM (#6078052)
If they received it all up front, they probably paid in the Terra coin. You think the Terra coin people have $38M in cash laying around? Or $38M BTC?

Terra tied the fate of the Nats deal to the value of their crypto, and now the coin going directly into the toilet. But I'm not sure how the Nats can just stop honoring the contract.

   11. Never Give an Inge (Dave) Posted: May 23, 2022 at 08:03 AM (#6078089)
If they received it all up front, they probably paid in the Terra coin. You think the Terra coin people have $38M in cash laying around? Or $38M BTC?


They had $1.6 billion of BTC reserves at one point. I'm guessing they couldn't pay for marketing expenses using their reserves, but they controlled a lot of cryptocurrency.

Even if they paid in Terra, no reason that the Nats couldn't have converted that to cash over time before the thing came crashing down.
   12. AuntBea odeurs de parfum de distance sociale Posted: May 23, 2022 at 08:35 AM (#6078093)
UST (Terra) was a ponzi. Investors were promised high steady returns with minimal risk, and investors were effectively paid their returns with new investors money. There was no real business model, and the only way it could have been sustained was through exponential growth. There were a multitude of articles calling it a ponzi starting at the end of last year, and all through the collapse.

The founders and venture capital such as Pantera killing (over $170 million just for Pantera by their own account, who were one of many vc) while all the losses went to retail investors. The insiders held 70% of the initial supply of Luna (convertible into Terra), and venture capital 25%, back when it was essentially free, and sold all the way up. Losses to retail was in the billions of dollars. Probably around $10 billion in losses in a coin that was supposed to be stable.

If this had happened in a regulated market it would have been clearly criminal in a thousand different ways, and as it is the founders are facing all kinds of lawsuits. If the Nationals are smart they'll immediately disassociate themselves anything Terra related.
   13. Hank Gillette Posted: May 24, 2022 at 01:20 AM (#6078265)
Stephen Curry makes nearly $46 million a season for playing basketball. WTF does he need to make ads for some crypto-currency?
   14. Greg Pope Posted: May 24, 2022 at 10:47 AM (#6078278)
Stephen Curry makes nearly $46 million a season for playing basketball. WTF does he need to make ads for some crypto-currency?

I don't know how much he makes from a particular sponsor, but he reportedlymakes $40 million a year from endorsements. I'm not sure what your problem with that is.
   15. sunday silence (again) Posted: May 24, 2022 at 03:50 PM (#6078313)
EL Salvador enters the room.
   16. RoyalsRetro (AG#1F) Posted: May 24, 2022 at 04:28 PM (#6078317)

Stephen Curry makes nearly $46 million a season for playing basketball. WTF does he need to make ads for some crypto-currency?


The thing about money is, you can always make more.
   17. Zach Posted: May 24, 2022 at 04:43 PM (#6078324)
I'm not sure what your problem with that is.

That cryptocurrencies are a scam?
   18. dejarouehg Posted: May 24, 2022 at 05:23 PM (#6078331)
EL Salvador enters the room.


Well done!
   19. Hombre Brotani Posted: May 24, 2022 at 10:35 PM (#6078362)
Stephen Curry makes nearly $46 million a season for playing basketball. WTF does he need to make ads for some crypto-currency?
After taxes and agents, that's probably just $20 million. How's he supposed to live like that?
   20. Never Give an Inge (Dave) Posted: May 25, 2022 at 08:35 AM (#6078386)

I wish that celebrities didn't shill for things they probably don't use or understand, but when the
Nationals and the former Staples Center owners are taking crypto money, and the same company that paid Curry for those ads had Bill Clinton and Tony Blair speaking at their conference in the Bahamas, I don't think the athletes are the biggest problem.
   21. snapper (history's 42nd greatest monster) Posted: May 25, 2022 at 09:54 AM (#6078396)
I wish that celebrities didn't shill for things they probably don't use or understand, but when the
Nationals and the former Staples Center owners are taking crypto money,


I don't think the transactional aspect of crypto is the scam part, it's the treatment of crypto as an asset class that's the problem.
   22. Red Menace Posted: May 25, 2022 at 11:10 AM (#6078400)
I wish that celebrities didn't shill for things they probably don't use or understand


Can't speak to the understanding, but professional athletes--young males with too much money--are exactly the demographic that probably is involved with crypto. What bothers me more is when they pretend to drink soft drinks and eat fast food. Lebron shills for Ruffles chips. Does anyone think he's eaten a chip in the past 10 years?
   23. Never Give an Inge (Dave) Posted: May 25, 2022 at 11:45 AM (#6078408)
What bothers me more is when they pretend to drink soft drinks and eat fast food. Lebron shills for Ruffles chips. Does anyone think he's eaten a chip in the past 10 years?

Maybe? There's definitely nacho chips on the table during his Taco Tuesday videos, but not sure if he eats potato chips as well.
   24. AuntBea odeurs de parfum de distance sociale Posted: May 25, 2022 at 12:01 PM (#6078410)
I'd be highly surprised if LeBron hasn't eaten some potato chips in the last 10 years. Probably not a staple of his diet though. These guys burn an enormous amount of calories. Yes, they have to stay lean, but there's plenty of slack for them to eat the occasional "unhealthy" food if that's what they want to do.
   25. Barry`s_Lazy_Boy Posted: May 25, 2022 at 03:27 PM (#6078426)
I wish that celebrities didn't shill for things they probably don't use or understand

Thats like 95% of endorsements.
   26. Never Give an Inge (Dave) Posted: May 25, 2022 at 07:50 PM (#6078452)
Thats like 95% of endorsements.

Yep.
   27. the Hugh Jorgan returns Posted: May 25, 2022 at 09:48 PM (#6078470)
speaking at their conference in the Bahamas


Of course any company based in the Bahamas inspires an air of legitimacy and a rock solid foundation!
   28. Voodoo Posted: May 25, 2022 at 11:51 PM (#6078484)
Of course any company based in the Bahamas inspires an air of legitimacy and a rock solid foundation!


As opposed to where?

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