TSM has signed a ten-year, $210M deal with Hong Kong-based cryptocurrency exchange Futures Exchange (FTX) that will see the organization give naming rights away for the duration of the deal, with the org set to be known as TSM FTX across all of their teams for the next decade. The deal is the latest in a series of moves by FTX to increase its visibility in the United States through partnerships with teams and orgs.
The move, first reported in the New York Times, comes off the back of FTX signing a deal earlier in the year with the Miami Heat and Miami-Dade County, Fla. for $135M over 19 years, in which they secured the naming rights to the arena where the Heat play. While TSM has a better annual rate on the face of it, they have sold what appear to be universal naming rights to the org, compared to the rights simply for an arena, in the case of the Heat.
TSM rebrands to TSM FTX after naming deal
The rebrand of the most valuable org in the US (according to Forbes) highlights the gap that exists between sport and esports in 2021. Teams like Liverpool, the Lakers, or Barcelona would never change their brand, as the innate value and recognition outweigh short-term gain, while in esports companies DAMWON Gaming (now DWG KIA) and now TSM have been happy to consider the deal if the price is right.
According to the New York Times article, the conversation between TSM CEO Andy "Reginald" Dinh and FTX founder Sam Bankman-Fried began when the TSM founder reached out to inquire about investing in FTX. “It gives us a strong foothold to really grow our brand globally,” Dinh said. “We want to truly be a global esports team. We have to invest in having bases in multiple places.”
The main appeal of the contract to TSM will be guaranteed income, something teams are more likely than ever to prioritize with the uncertainty caused by the global pandemic and economic slowdowns that have followed, while FTX gains traction in a new market and attention in the west. Described by their founder as the “fourth-largest global cryptocurrency exchange based outside of China”, FTX is one of many firms to have gained massively from the boom in crypto trading.
What is FTX?
FTX is currently involved in their own round of fundraising, which would see the firm valued at $20B according to Bankman-Fried, a proponent of what is known as ‘effective altruism’, which prioritizes making the maximum amount of profit to give away the largest sums. The inherent internal tension between the two positions is obvious, but unlikely to give TSM’s owners sleepless nights at this stage in the org’s history.
FTX allows people to buy and sell what is known as tokenized stocks and crypto derivatives, described by the NYT as “bets on the future value of currencies like Bitcoin, as well as wagers on other future political and financial possibilities”. In a recent Forbes interview, Bankman-Fried spoke of “how we (FTX) can reach out to other demographics who haven’t historically been in our wheelhouse”, and there is no doubt this move will introduce their name to an entirely new, young userbase.