Before he was arrested on December 12, 2022, Sam Bankman-Fried wrote up his testimony for the House banking committee, scheduled for December 13. He never got to deliver it, but I found a copy of it on Forbes
. Among his many defenses for why the collapse of FTX was, somehow, not really his fault, was this one:
“I wish that I had remained grounded, and spent at least as much time focusing on and safeguarding user assets and risk as I did on branding and partnerships.”
So, Bankman-Fried spent too much time on branding! Too much time on building the FTX brand image, hanging out with celebrities, making arena-naming deals, appearing at events, and not enough time on risk management. Ah, that definitely explains what happened.
Back in the 1930s, when radio was a new medium, certain advertisers were likewise seen as spending too much time on their sponsored radio entertainment. Some critics argued that advertising on radio was ineffective and to sponsor a program was only to scratch a company’s “publicity itch.” These advertisers, in this view, were seeking glory, not sales. They wanted to hang out with celebrities, which is probably more fun than manufacturing products.
The comedian Fred Allen lampooned his own sponsor in a 1939 skit about “odd occupations”
on his live radio program, Town Hall Tonight.
Lee Bristol, appearing as the representative of Allen’s sponsor, Bristol-Myers, played along. Allen asked Bristol how one became a radio sponsor, the profiled job of the week, and Bristol replied, “Well, first you have to get a business, naturally. . . . If you want the business to grow you have to advertise. Advertising today involves radio.” And then, according to Bristol, “The first thing you know you wake up at an audition. A dotted line appears from under an advertising agency vice-president’s coat. And the next thing you know—you’re a sponsor.” Allen replied, “Sounds sort of complicated, doesn’t it?” Bristol answered, “Yes, Fred. To the average business man, suddenly getting involved with swing bands, scat singers and comedians, it is rather confusing.” Bristol went on, “Several nights each week I have to listen to the radio programs we sponsor.” “Gosh,” Allen replied, “a sponsor’s life is sure tough. You not only pay for radio programs you have to listen to them, as well.”
Sam Bankman-Fried not only paid for celebrities such as Larry David, Tom Brady, and Gisele Bundchen to promote FTX, he might have also been too busy taking in all that sponsored content to do what he said he was doing at FTX: safeguarding user assets. Now we know who to blame!