The bankruptcy of a crypto-fund has led to problems with payments to football players. What does all this have to do with anything?
National Women’s Soccer League (NWSL) players could lose their previously promised payout from their deal with cryptocurrency broker Voyager due to its bankruptcy. The fees were part of Voyager’s sponsorship and partnership with SWSL, entered into back in December last year. It is also worth noting that this partnership was one of the biggest in the history of the sports organisation. The deal with Voyager was also supposed to be a multi-year cooperation, but now it was not to be. We go on to elaborate on what is happening.
It should be noted that the big news of 2022 among large cryptocurrency companies in one way or another was the collapse of Three Arrows Capital. Until recently, the giant had billions of dollars under its management, and now it has become part of history. Read more about this situation in a separate article.
Consequences of cryptocurrencies going bankrupt
One of the main conditions of the deal was that team members were paid in cryptocurrency – they were to receive half of their fees in regular currency and another half in crypto. Moreover, each player was entitled to a personal account on the Voyager platform, where the deposit of their fees in cryptocurrency was made. Under the terms of the contract, the deposit could also be used to build their own crypto portfolio, meaning they could safely interact with it for further investments.
According to Decrypt’s sources, the agreement between SWSL and Voyager fell through literally at the start of the programme, as members of the league’s sports teams did not even receive their first deposits in crypto. This happened before the crypto-broker’s bankruptcy was even formalised, and now the prospects of receiving payouts remain very dim at all. Here’s a quote on the matter, taken from an NWSL press release.
The Player Fund was always intended to distribute cryptocurrency to accounts at Voyager with the aim of educating female athletes about investing in the cryptosphere. As such, a certain amount of risk was always assumed due to the volatility of the crypto market.
In this case, volatility, i.e. sharp changes in coin exchange rates, did play a role. In May and June 2022, fluctuations in the value of digital assets led to the liquidation of many trading positions of various crypto funds and large companies.
NWSL
Fortunately for the players themselves, the bankruptcy of Voyager will change little globally, as crypto only wanted to pay affiliate bonuses. The base salary of the athletes has not changed.
Former professional footballer Hayley Carter has already reacted to the event. Here’s her quote from Twitter.
NWSL players have been hit by the league itself in a dubious deal that literally anyone who follows the markets and investment platforms would call a failure. It’s all down to the NWSL here. We all knew this was going to happen and yet it is still an incredible disappointment.
That sounds like the typical line of someone who does not understand what is going on with blockchain and cryptocurrencies in general. Yes, some projects do fall to zero at times, but this is the exception rather than the rule. Therefore, one could not count on the collapse of a popular company - and even more so of such a large one. Still, the bankruptcy of Voyager was the result of a series of unpleasant coincidences within the coin industry that could not have been foreseen in advance.
Footballer Hayley Carter
Carter noted that the partnership with Voyager did not affect the athletes’ base income, but it did cause serious reputational damage to the League. Such a deal is another reason to question the dozens of other contracts that various sports clubs often enter into. If they make them very dependent on the volatile nature of the crypto market, it is a deliberately losing strategy, the sport believes.
Recall that last National Basketball Association (NBA) season, cryptocurrencies spent about $130 million on various partnerships with its structures. Also during the last Super Bowl of the United States National Football League (NFL) a record-breaking advertising campaign was launched to attract new investors in cryptocurrencies. However, it turned out a little later that even the expensive infusion of advertising did not help companies achieve their goal, as the market had ceased to be attractive to newcomer investors.
Voyager Digital’s latest blog post on crypto fund debt restructuring
The Voyager story is another blow to the reputation of the crypto market as a whole. The more news about such failed partnerships, the less big investors will be willing to invest in digital currencies. And that will in some ways surely set off a new global bullrun in the coin niche.
That said, we don't think the situation will have any impact on further partnerships with the cryptocurrency industry. Still, more often than not, sports clubs benefit from such collaborations. And in this case what happened was limited to reputational problems, not financial losses.
Related posts
