A Florida judge has ordered the cancellation of FTX’s sponsorship of the home of the Miami Heat, paving the way for new bids for the sports arena.
A spokesperson for the Miami-Dade count stated that unless a new sponsor is found, the stadium will simply be known as “The Arena.”
FTX Stripped Of Naming Rights
With the collapse of the FTX exchange and its associated businesses, a Florida judge has stripped the exchange of its naming rights to the home stadium of the Miami Heat. As a result, the FTX Arena is no more. The decision came soon after a court hearing that took place at the Bankruptcy Court of Delaware, where attorneys told the court that funds from Alameda Research were used to fund the deal with Miami-Dade county.
The county was already given prior approval to remove the FTX signage after the Sam Bankman-Fried-led exchange filed for Chapter 11 bankruptcy protection in November 2022, shocking the cryptocurrency ecosystem.
Search For New Bidders Begins
With the court order taking away the naming rights from FTX, the owners of the Miami Heat Arena are free to look for new bidders for naming rights and other partnerships. Legal analyst, David Weinstein, described the way forward, stating,
“Their short-term goal, both by filing their own motion and by becoming the recipients of the granting of this motion, is that it will no longer be the FTX Arena. They will have, of course, whatever remedies might be available under the contract to recover lost money. But given the nature of the way everything went down with this, I think it’s one of those situations where you cut ties, put it behind you, and move on to the future.”
What About Funds Received By the County?
Weinstein added that Miami-Dade county would have to decide what to do with the funds that it has already received in the deal and whether it should keep the funds or turn them over to the bankruptcy court that is overseeing the FTX case.
“That becomes something for the court to look into how [Miami-Dade] obtained the money, whether or not they did their due diligence, whether they were duped just like every other investor in this alleged Ponzi scheme. And whether or not they have a good faith basis to say we received that money.”
The FTX-Miami-Dade Deal
The arena in question opened in 1999 as the 18,000-seat American Airlines Arena. In 2021, FTX signed a 19-year contract with Miami-Dade county for the naming rights in a deal worth $135 million. Under the deal, the county stood to earn around $2 million a year. The deal raised considerable eyebrows at the time, not only due to its high value but also because FTX was just two years at the time, with its launch complete only in 2019. At the time, Bankman-Fried had stated in an interview,
“It’s been a pretty good year for us. To the point where, frankly, we don’t need to rely on the other 18 years to have the funds for this. So, it’s been a phenomenal year for a number of businesses and for the crypto industry in particular. And then I think for us, even more so. And so, that’s given us a pretty big cushion.”
FTX was not the only entity in the crypto space to go the naming rights deal route before the crypto winter. In 2021, Crypto.com announced it had signed a deal with $700 million with the owners of the Staples Centre, home of the Los Angeles Lakers and Clippers.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.