Written by: Leonard Armato for Forbes.com

The entire sports world has been turned on its head following the arrest of FTX CEO Sam Bankman-Fried Monday. Before the scandal, FTX had sponsorship deals with sports leagues, teams, arenas, celebrities and even made its way onto the chest of Major League Baseball umpires.

FTX was a major sponsor of several high-profile sports teams and events including the Miami Heat, the Dallas Mavericks, and the Ultimate Fighting Championship (UFC). It is unclear how these organizations will be affected by the loss of FTX’s sponsorship, but it is likely that they will need to find new sponsors to make up for the lost funding.

In addition to sponsoring sports teams, FTX trotted out a host of athletes and celebrities such as Tom Brady and his ex-wife Giselle Bundchen, Steph Curry and Trevor Lawrence, among others, to promote the crypto exchange in a highly public fashion. All these athletes and celebrities are being sued in a class action lawsuit for promoting FTX through advertising.

FTX even ran a Super Bowl ad starring Larry David, and it was reported that the company used customer deposits to fund that ad. This has implications not only for FTX, but the agencies and media companies associated with that deal. Namely the money FTX spent with its agency, Dentsu, and Super Bowl broadcaster NBC, which was likely misappropriated customer funds. Wow!

But we may be only scratching the surface of what is yet to come. Crypto firms have spent $2.4 billion in sports sponsorships in 2022. One example is Crypto.com ,which has leveraged sports for brand recognition, agreeing to pay $700 million (over 20 years) to put its name on the arena formerly called the Staples Center. Around the water cooler, people are asking how much of the $700 million Crypto.com committed to the arena is “at risk?” And beyond Crypto.com, how much of future sponsorship commitments secured from Crypto firms, which total in the billions of dollars, are at risk for sports leagues and teams? The short answer is “all of it.”

This latest controversy has grave implications regarding the role of cryptocurrency in the sports sponsorship industry for leagues, teams and athletes, so what does the future look like? Normally, these types of deals are led by sponsor sales agents looking to maximize company revenue and have but one mantra: show me the money. Generally speaking, money is the determining factor in sizing up the available opportunity. It leaves the potential for oversight on the risk versus benefit analysis and due diligence that should follow any initial pitch, including whether or not the business in question will be able to follow through on promised future payments.

With the FTX collapse and spate of lawsuits involving athletes and celebrities that endorsed the company, a whole new level of scrutiny will emerge. The risk factors that will be examined include such things as company history, their regulation and governance practices, as well as the financial stability of company and the track record of the management team. Akin to the process that a private equity firm puts in place for the potential acquisition of any given company.

Overall, the highly public and far reaching implications of FTX’s implosion has magnified the risks, and challenges associated with the cryptocurrency market. But expect that same trepidation to carry over into all sponsorship deals in the future that will necessarily trigger greater diligence and less tolerance for risk. Sports organizations will adopt a highly cautious approach when considering partnerships with cryptocurrency-based companies, because of the highly volatile and virtually unregulated nature of the industry, but a higher level of scrutiny will also be applied to company partners bringing anything less than a long standing and proven track record of excellence and trust.

By Leonard Armato for Forbes.com

The National Collegiate Athletic Association (NCAA) recently voted to allow student-athletes to profit from their name, image, and likeness (NIL), a major victory for college athletes who have long been unable to monetize the value of their public persona. This decision, however, does not apply to high school athletes. Most jurisdictions have strict rules prohibiting them from profiting from their NIL, including the state of Georgia.

Julian Lewis is a 14 year old prodigy and Freshman quarterback for Carrollton High School in Atlanta, Georgia. Last weekend Julian set a State Finals record by throwing for 531 yards and 5 touchdowns in the State Championship Game. Although he is already a star athlete with influence, over 100K Instagram followers, and recognized as a phenomenal college prospect, laws in the state of Georgia do not permit Julian to profit from his NIL.

He and his family have already begun to feel the effects. Julian’s father, TC Lewis said: “We have turned down multiple money making opportunities over the past year that would sure help offset the expense our family must undertake to ensure that Julian receives the best training. We are aware of high school athletes from other states, no more talented or influential than Julian, generating substantial income through their NIL. We love the football program, education, and culture at Carrollton and it is sad that if Julian wanted to capitalize on his football achievements and influence the only option we have would be to move to another state which allows high school athletes to capitalize on their notoriety”.

Justin Giangrande is the CEO of the The Network Advisory (TNA) and an NIL pioneer who advises and represents college and high school athletes said: “This amounts to outright discrimination and lack of equality for young athletes that are similarly situated. NIL must be applied equally to everyone and it is incumbent on each state to recognize that and protect its resident athletes”.

Notable sports attorney Tabetha Plummer, who represents Deion Sanders among others, cut to the heart of the problem stating: “states are slowly coming on board but unless they move quickly many good people will be adversely affected. The families of talented athletes will have no choice but to move or send their kids off to schools in states that permit high school athletes to profit from their NIL. In states that do not recognize these NIL rights the result will be that coaches and local communities will suffer by losing these outstanding young men and women.”

Plummer believes that time of the essence for state lawmakers to take action and pass laws that allow high school athletes to profit off of their NIL. This would level the playing field and give young athletes like Julian Lewis the same opportunities as college athletes and certain of their their high school counterparts.

NIL legal specialist Darren Heitner sums it up nicely: “The biggest mistake states made when they passed NIL legislation leading up to the NCAA removing its prohibition on NIL transactions was that they stopped at college athletes and did not mandate that high school athletes have the same rights.”

Julian Lewis is just one example of the many high school athletes who are just as talented and deserving of the opportunity to earn income from their NIL as college athletes. The NCAA’s decision to allow college athletes to profit off of their NIL is a step in the right direction but neglecting to address the issue of high school NIL was a huge misstep that must now be corrected by state legislation. Until then, high school athletes in states like Georgia and Texas will be unfairly disadvantaged and unable realize their full potential to earn the income they deserve.

By: Leonard Armato for Forbes.com

It was national news when Deion Sanders was hired last week as the head coach of Colorado University’s struggling football team and college football will never be the same. “Prime Time” Deion lit up the media with his press conference announcing his new coaching job and his first meeting with the current University of Colorado football team.

At his press conference Deion made it clear that he was “old school” and that there was “new sheriff in town” that would hold his players to the highest standard of accountability both on and off the field. He then conducted a players meeting and told them to go get on the portal or be ready to compete against the top tier new talent he would attract to the school. Following his announcement, it was reported by On3.com that the school has had over 200 players including a number of 4 and 5 star recruits inquire about transferring to play at Colorado and 4 star running back Dylan Edwards de-committed to Notre Dame and put Colorado on his list, alongside Kansas State as his school of choice. The smart money is on Colorado and Coach Prime.

Deion’s media blitz made it clear to the world that college coaches are the new rock stars of collegiate sports and have the power to transform a program through the use of the transfer portal. But Deion wasn’t the first charismatic coach to re-ignite a flagging program through the use of the portal. Lincoln Riley did it spectacularly this past season for the University of Southern California by taking a 4-8 team to a record of 11-2 by taking Caleb Williams, his Heisman Trophy front runner and star quarterback with him from Oklahoma via the transfer portal. Riley also brought in roughly 40 new players via the portal including star wide receiver, Mario Williams and CB Latrell McCutchin.

The message is now clear to conferences and universities that charismatic coaches are the key to building a successful program and schools must be willing to make the investment if they hope to compete. Deion Sanders agreement averages roughly $6M per year and while Colorado has never awarded that type of lucrative contract to a coach before, the expectation is that the investment will provide the school a handsome return by transforming the football program and super charging fundraising from boosters of the school. Sponsorship and ticket sales have already increased dramatically and boosters are for the first time in years lining up to provide financial support to the program.

The effects of all this have filtered up all the way to the Conference level. At the Sports Business Journal Intercollegiate Athletics Forum in Las Vegas this past week all of the Conference Commissioners discussed the importance of their media deals and how they were driven by the success of their football programs. Pac-12 Commissioner, George Kliavkoff, was one of the few Commissioners still in the midst of negotiating the media deal for his Conference and he said they would not likely conclude until early 2023. It has been widely reported that ESPN and Amazon are the prime candidates to secure these rights but that the parties are still far apart. Admittedly several factors will impact the value of that deal and how the negotiations ultimately conclude. One is whether UCLA will be permitted by the California board of Regents to withdraw from the Pac-12. That decision is expected by next week. If UCLA is somehow forced to stay that would strengthen the Pac-12’s hand in its media rights negotiations. And second, Kliavkoff openly shared his enthusiasm that Colorado (a Pac-12 schools) had secured Deion Sanders as its head football coach. If you read the tea leaves, Deion will likely turn the Buffs into a football powerhouse which makes the Pac-12 media rights significantly more valuable.

It will be exciting to see where this is all headed but every Conference and University needs to come to grips with the reality that coaches are king and every school is but a charismatic head coach away from being a contender for the National Championship and the money and prestige that comes along with it.

Under Armour has been named Ad Age’s Marketer of the Year primarily for its novel approach marketing to women. The success Under Armour has enjoyed with its “I Will” campaign underscores why Title IX — while generating lots of positive results — has not succeeded in reshaping opportunities for women in sports marketing and redefining the way our society treats and values women’s sports.

Now, Puma has followed suit by signing Rihanna as the face of its women’s fitness line and giving her the title of “creative director,” and Nike has joined the ranks by inking a deal with top model Karlie Kloss.

When Under Armour debuted its “I Will” campaign with a TV commercial featuring Gisele Bundchen, I offered the opinion that, while the effort is effective, a double standard has been created by the media that has shaped viewing habits, public opinion and marketing. This trend does not bode well for the growth of women’s sports nor does it help top-tier female athletes who hope to build a brand for themselves or, at the very least, secure valuable endorsements.

The starting point of all this is that women’s sports get a fraction of the respect and audience that men’s sports do. The media has not historically promoted or distributed women’s sports. And most women athletes grew up looking up to male athletes as their role models.

Title IX was supposed to provide equality for women in athletics by ensuring that women could participate in organized competitive sports, and clearly there have been benefits. Reportedly, 2.8 million girls around the country play varsity sports leading to more than $1 million in college scholarships per year. Moreover, such participation clearly benefited women off the field of play in that sports teaches important virtues necessary to succeed in business: hard work, team work, and perseverance. In fact, 52 percent of women executives today, according to espnW, participated in competitive sports at the university level or above.

However, Title IX did nothing to improve equal opportunity for women interested in professional sports as a career — it just did not go far enough.

Girls got to play instead of cheerlead, but our sports viewing habits did not change. Why? The reason is that, while schools had to change and let girls play sports, the media was allowed to continue its old ways of ignoring women’s sports. A primary reason why we do not perceive male and female athletes equally is that the media treat women’s sports like second-class citizens, and advertisers only follow suit.

Bottom line, our attitude toward women’s athletes is shaped by sports media and Madison Avenue. And Madison Avenue sets the standard for our double standard of social currency among men (rich/winner/athletic) and women (attractive/youthful).

When it comes to male athletes, all that matters is whether you win at one of the major sports. The general rule is that if you are a winner — the best in the business — then you will be rewarded handsomely with endorsements or marketing deals like Michael Jordan, Shaquille O’Neal, Kobe Bryant, LeBron James or Kevin Durant, to name a few. In marked contrast, the sports brands realized over the years that you don’t have to pay top women athletes the big bucks no matter what.

For example, when we represented Lisa Leslie, the best player in the WNBA, Nike kept reducing its offers to her even as she got better and more dominant as a player. The reasoning was that Nike discovered that male athletes were still driving the sales of the shoes anyway (girls looked up to the male athletes more because of the additional exposure and promotion that they received).

More recently, as women have been wearing workout gear or athletic apparel throughout the day (as men have done for years), the sports brands have started to experiment with different approaches seeing this as a growth market. Now, there is much more emphasis on whether a female athlete is attractive and youthful, rather than the best in the world. In fact, it is arguably better to be an athletic youthful model rather than an athlete who happens to be attractive (at least from Under Armour’s perspective). All of this is completely in line with Madison Avenue’s view of how to market women.

There was quite a bit of chatter around Under Armour’s signing of Bundchen to a reportedly whopping deal to be the face of its women’s athletic footwear and apparel line. Obviously, she is super-attractive, athletic and perhaps even a remarkable lady, but she certainly is not considered a world-class athlete nor is she the best in the world at a sport that large numbers of girls play (i.e. soccer, basketball or volleyball).

But who can argue with Under Armour’s results in light of the growth for its women’s business as a result of the “I Will” campaign?

I appreciate attractive female athletes, but I don’t think that being physically attractive should be the initial criterion when a sports brand is deciding whether to sign a woman endorser. But it seems the women who are buying the product don’t really care about this.

If we really want to see change, the sports media, starting with the major distributors like ESPN, Fox and NBC, should be required to promote and distribute a certain amount of women’s sports on TV. This would require legislative action much like Title IX or the Children’s Television Act. The Federal Communications Commission and perhaps the courts would likely follow to support and give teeth to that legislation.

Girls and women need to be conditioned to watch women’s sports. They make up more than half the viewing audience for goodness sake. Not only should sports companies apply the same standard to female athletes as they do to men, they should make women’s sports just as relevant to women as men’s sports are to men.

If the government were courageous enough to take affirmative action, this would likely happen.