FTX Seeks to Reverse Tens of millions of {Dollars} Paid to Athletes for Model Hype

• FTX examines recovering hundreds of thousands of {dollars} paid to athletes and groups.
• Funds to athletes like Shaquille O’Neal and Naomi Osaka are underneath scrutiny.
• The report revealed particular funds to Main League Baseball and System 1 partnerships.

In line with a current report by Bloomberg, monetary advisers engaged on behalf of FTX Group are analyzing the potential of recovering hundreds of thousands of {dollars} in funds made to outstanding figures in numerous skilled athletes and groups. 

The report famous that the funds have been made as a part of promotional agreements with FTX founder Sam Bankman-Fried earlier than it collapsed in November final yr. 

Notably, the FTX monetary advisers disclosed their scrutiny of the funds in courtroom paperwork. They analyze whether or not these transfers might be clawed again underneath the provisions of Chapter 11 chapter guidelines that enable firms to reverse transactions simply earlier than a chapter submitting.

Whereas the report doesn’t present a breakdown of FTX’s spending on endorsements, it disclosed how FTX leveraged the star energy of movie star athletes for advertising and marketing functions. It included celebrities from Main League Baseball, Nationwide Basketball Affiliation groups, and System 1.

In the meantime, the report doesn’t specify whether or not FTX’s advisers consider all of the funds might be recovered or if any athletes or groups have voluntarily provided to return the funds. 

Furthermore, FTX cautioned that these monetary disclosures will not be full as a consequence of an absence of detailed historic amortization data and could also be topic to additional amendments. FTX’s CEO following the chapter submitting, John J. Ray III, defined that the corporate lacked dependable monetary data and didn’t preserve full monetary information.

Nonetheless, the report revealed particular funds made by FTX, together with $4.9 million disbursed to Main League Baseball. It additionally included roughly $12.2 million associated to partnership agreements with the System 1 racing staff Mercedes-AMG Petronas. 

Moreover, FTX disclosed $3.4 million in funds to the NBA’s Golden State Warriors and practically $242,000 to star participant Stephen Curry’s enterprise, SC30 Inc. 

FTX indicated that some System 1-related funds and funds to the Golden State Warriors might be reversed by means of the Chapter 11 course of, based mostly on billing information from the agency’s monetary adviser, Alvarez & Marsal.