Atletico Madrid to Sue WhaleFin Over Unpaid Sponsorship Fees
The renowned Spanish football club Atletico Madrid is preparing to take legal action against Singapore-based cryptocurrency exchange WhaleFin. The dispute revolves around a breach of contract regarding unpaid sponsorship fees totaling €40 million ($44 million).
Atletico Madrid Seeks $21 Million in Damages in Lawsuit
Atletico Madrid, a prestigious Spanish football club, is getting ready for a legal battle with Singaporean cryptocurrency exchange WhaleFin. The club claims that WhaleFin has violated their contract by failing to make the agreed-upon payments. As a result, Atletico Madrid is seeking €20 million in damages.
The background to this legal dispute involves financial troubles faced by Amber Group, the owner of WhaleFin. In December 2022, reports highlighted Amber Group’s difficulties, leading to the termination of a similar sponsorship deal with English Premier League’s Chelsea FC valued at $25 million annually.
Inter Milan and Roma Face Sponsorship Issues with DigitalBits
Similar problems have arisen for other European football clubs dealing with cryptocurrency firms. Italian clubs Inter Milan and Roma encountered sponsorship failures with blockchain company DigitalBits. The two clubs had to sever ties with DigitalBits after it failed to pay over €27 million ($30 million) combined in sponsorship fees.
Roma’s agreement with DigitalBits began with a three-year shirt sponsorship deal with Zytara Labs in July 2021. Inter Milan signed a four-year contract for sleeve sponsorship rights, later upgraded to front-of-shirt rights for the 2022-23 season.
However, Inter Milan faced issues with the partnership as early as October last year and sought a new shirt sponsor. By March, it was revealed that Inter had not received any payments from DigitalBits, despite an €85 million agreement. Consequently, both Inter Milan and Roma removed the DigitalBits logo from their shirts due to ongoing payment failures.
Hot Take: Cryptocurrency Sponsorships in Football: A Risky Business
The recent disputes between football clubs and cryptocurrency exchanges highlight the risks involved in such sponsorship deals. The volatile nature of the crypto industry can lead to financial instability for these companies, causing them to default on their payment obligations. As a result, football clubs may suffer significant financial losses and damage to their reputation.
While cryptocurrency sponsorships offer potential benefits for both parties, it is crucial for football clubs to carefully evaluate the financial stability and track record of these crypto firms before entering into agreements. Similarly, cryptocurrency exchanges must ensure they have sufficient resources to fulfill their sponsorship commitments.
By taking proactive measures and conducting thorough due diligence, football clubs can mitigate the risks associated with cryptocurrency sponsorships and protect their interests in the ever-evolving world of digital assets.
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