Miami-Dade County, stuck in a 19-year contract with FTX, seeks to rename its arena
The county, which owns the arena where the Miami Heat play, wants a bankruptcy judge to let it end its $135 million contract with the failed cryptocurrency company so it can find a new sponsor.
In the wake of FTX's collapse, Miami-Dade County wants the logo of the now-bankrupt cryptocurrency exchange company removed from its sports arena, where the NBA's Miami Heat plays its home games.
The county, which owns the arena, asked a federal judge to immediately end a 19-year, $135 million naming rights deal with FTX, in a motion filed Tuesday with the Delaware court where the FTX bankruptcy proceedings are taking place. Miami-Dade argued that continuing the agreement with the failed company would cause "significant hardship" for the county and hurt efforts to find a new arena sponsor.
FTX founder Sam Bankman-Fried and his company are under investigation by the Department of Justice and the Securities and Exchange Commission for allegedly mishandling customers' funds, much of which may have been funneled to Bankman-Fried's hedge fund, Alameda Research.
After FTX filed for bankruptcy protection on Nov. 11, a judge issued a "stay" order that prevents any entity from acting against the company, which includes Miami-Dade's desired termination of its sponsorship agreement.
A hearing for the case is set for Dec. 16. Unless the court grants the county relief from the stay order, Miami-Dade and the Heat will remain locked into the deal, which began last year.
FTX already has paid Miami-Dade almost $20 million, and has a $5.5 million payment due in January. Under the deal's terms, a default on FTX's part would require the company to pay the county for three years. That amounts to $17 million, which the county is seeking in damages, according to the county's court filing.
The company's logo still decorates the building, the Heat's basketball court and the team's jerseys. For months, a commercial featuring longtime Heat player Udonis Haslem promoting the crypto company has run on local game broadcasts.
Under Bankman-Fried, the Bahamas-based FTX quickly grew to become the third-largest cryptocurrency exchange, and recently was valued at some $30 billion. Good branding and press helped cast the 30-year-old entrepreneur as a promising leader who could bring legitimacy to a largely murky and unregulated industry.
The Miami Heat deal was just one of several sport sponsorship contracts FTX has signed, according to Decrypt. In 2021 alone, the crypto company had secured deals with Major League Baseball, the Golden State Warriors and the Washington Wizards of the NBA, the Washington Capitals of the NHL, and esports giant TSM.
In an interview with the cryptocurency news outlet that year, then CEO Bankman-Fried was asked how his two-year-old company had the long-term stability necessary to honor a nearly 20-year deal.
"Without going into the details, it's been a pretty good year for us," Bankman-Fried said. "To the point where, frankly, we don't need to rely on the other 18 years to have the funds for this."
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