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Earlier this week, U.S. esports organization Team SoloMid (TSM) signed a record-breaking deal with cryptocurrency trading platform FTX in a 10-year deal worth of $ 210 million (A $ 271 million).

The naming rights deal is the largest sponsorship deal in esports history with TSM poised to rename itself to TSM FTX.

Commenting on the deal, TSM Founder and CEO Andy Dinh said, “This deal is extremely important to the future of our organization, but it was just as important for me personally to partner with a also visionary leader.

According to BIG Esports founder and CEO Chris Smith, the deal is not going to become trivial, at least in the short term.

“It’s a big outlier,” Smith said. Ministry of Sports.

“Newzoo [a gaming data analytic website] said the entire esports industry is valued at around US $ 970 million (AU $ 1.25 billion) in 2020.

“This one-time deal represents almost 22% of that total figure,” he said.

However, the deal is huge compared to other deals in the sports landscape, according to Smith.

“This deal is hugely important financial equipment that overshadows most of the world’s leading sports sponsorships,” Smith said.

“This tells me that FTX is probably betting on the long term growth of the industry.

“By comparison, FTX signed a 19-year deal for US $ 135 million (AU $ 174 million) with the Miami Heat stadium,” he said.

The deal suffered a setback with Riot Games not allowing TSM to use FTX as a name in League of Legends and Valorant broadcasts.

Sponsoring the name and jersey with FTX is in violation of the developer’s guidelines for partnerships with cryptocurrency exchanges.

The League of Legends Championship Series (LCS) has approved the partnership between TSM and FTX but will impose restrictions on the use of the FTX brand.

Riot’s Esports Manager for North America and Oceania and Acting LCS Commissioner Chris Greely said:

“Accordingly, TSM’s new naming convention and the placement of the FTX trademark on TSM jerseys will not apply to LCS or other Riot Games esports in North America.”

It is also worth noting that there is a possibility that the transaction will not only be paid in USD or in advance, as Smith speculates.

“There are other possibilities that some of the sponsorship is tied to performance metrics or provided in the form of tokens or other cryptocurrencies,” Smith said. Ministry of Sports.

While it remains to be seen whether deals like this will become a future sponsorship standard in the esports industry, the deal speaks to the growth of the industry as well as the future of the sport.