Riot Games attempts to cut off $96 million FTX deal with LCS
In a motion made by Riot Games to “compel FTX to reject the agreement”, the makers of League of Legends are trying to cut ties between FTX and the LCS before the start of the 2023 season.
FTX’s monumental collapse has brought with it a slew of controversy. From former CEO Sam Bankman-Fried playing League of Legends during meetings (and apparently sucking at it) to TSM suspending FTX’s place as a title sponsor, the bankruptcy of the service has had an effect on both the LCS and League of Legends as a whole.
Now, Riot Games is trying to cut ties with the crypto exchange service and end its deal by filing a motion related to the FTX bankruptcy case.
In this motion, it was revealed that FTX has outstanding payments due to Riot Games as a sponsor of the LCS, and in the filing, it’s claimed that “it is not realistic to assume that FTX will ever be able to provide assurances of future performance.”
Riot wants FTX to reject their $96 million LCS agreement
To clarify, Riot’s filing isn’t a direct lawsuit against FTX. Rather, it’s a motion, meaning that it is something to be viewed and weighed upon by the court before a hearing. In this case, this will be the FTX bankruptcy hearing.
Through these legal proceedings, the amounts attached to the contract have been revealed to the public. While FTX has paid through some of the deal that totals over $96 million USD, it still owes Riot Games a large sum for the time spent as an LCS sponsor.
In the motion to the court, Riot has argued that its image remains “inextricably linked to FTX through its former CEO, Mr. Bankman-Fried” as a result of his affinity for League of Legends and that the court “should compel FTX to reject the Agreement”.
One of the most important things to note about Riot’s motion is its assertion that “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.”
Riot Games will also take action even if FTX doesn’t reject the deal, requesting that the court “grant Riot relief from the automatic stay to permit Riot to terminate the agreement”.
“Automatic stay” is a term that, when used in relation to bankruptcy, essentially means the creditor cannot take action against the debtor – even if the debtor can’t pay what’s owed. FTX being unable to pay out would be the reason to terminate the agreement, giving Riot a way to sever ties that doesn’t involve further action.
Going by the wording in the motion, Riot Games is determined to terminate its partnership with FTX one way or another. The results of this motion to the court will determine how it is done.