Miami-Dade County, with a 19-year contract with FTX, is trying to rebrand its arena

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dated: 2022-11-25 07:22:14 .

The signs at FTX Arena, home of the Miami Heat basketball team, were lit up on Saturday. The rapid collapse of cryptocurrency exchange FTX into bankruptcy prompted the arena’s owner, Miami-Dade County, to seek a break in its naming rights deal with FTX.

Marta Lavandi/AP

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Marta Lavandi/AP

The signs at FTX Arena, home of the Miami Heat basketball team, were lit up on Saturday. The rapid collapse of cryptocurrency exchange FTX into bankruptcy prompted the arena’s owner, Miami-Dade County, to seek a break in its naming rights deal with FTX.

Marta Lavandi/AP

Following the collapse of FTX, Miami-Dade County wants the now-bankrupt cryptocurrency exchange’s logo removed from its sports arena, where the NBA’s Miami Heat play their home games.

The county that owns the arena asked a federal judge to immediately terminate the 19-year, $135 million naming rights agreement with FTX in a motion filed Tuesday in Delaware court, where FTX’s bankruptcy proceedings are pending. Miami-Dade argued that continuing the deal with the failed company would cause “significant hardship” for the county and hinder efforts to find a new sponsor for the arena.

FTX founder Sam Bankman-Fried and his firm are under investigation by the Justice Department and the Securities and Exchange Commission for allegedly misappropriating client funds, most of which may have been directed to Bankman-Fried’s hedge fund Alameda Research.

After FTX filed for bankruptcy protection on Nov. 11, a judge issued a “stay order” preventing the company from taking action against the company, including terminating its sponsorship deal, which Miami-Dade wanted.

The hearing in the case is scheduled for December 16. Unless the court grants the district an exemption from the stay order, Miami-Dade and the Heat will remain involved in the deal that began last year.

FTX has already paid Miami-Dade nearly $20 million, and is due $5.5 million in January. Under the terms of the contract, a default by FTX would obligate the company to pay the county over three years. That totals $17 million the district is seeking in damages, according to district court filings.

The company’s logo still adorns the building, the Heat’s basketball court and the team’s jerseys. For months, a commercial featuring longtime Heat player Udonis Haslem promoting a crypto company has been running on local game broadcasts.

Under Bankman-Fried, Bahamas-based FTX has grown rapidly to become the third largest cryptocurrency exchange and was recently valued at around $30 billion. Good branding and good press helped position the 30-year-old entrepreneur as a promising leader who could lend legitimacy to a largely dismal and unregulated industry.

The Miami Heat deal was just one of several sports sponsorship deals signed by FTX, according to Decrypt. In 2021 alone, the crypto company signed contracts with Major League Baseball, NBA Golden State Warriors and Washington Wizards, NHL Washington Capitals and esports giant TSM.

In an interview with a cryptocurrency news outlet earlier this year, then-CEO Bankman-Fried was asked how his two-year-old company had the long-term stability needed to honor its nearly 20-year contract.

“Without going into too much detail, it’s been a pretty good year for us,” Bankman-Fried said. “To the point that, frankly, we don’t have to rely on the other 18 years to raise the funds for it.”

A year and a half later, his company owes creditors more than $3 billion as new management struggles to explain the disappearance of an undisclosed amount of client funds.

Source: www.npr.org

Miami-Dade County, with a 19-year contract with FTX, is trying to rebrand its arena

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Source https://canadatoday.news/ca/miami-dade-county-locked-into-a-19-year-deal-with-ftx-is-attempting-to-rebrand-its-arena-161882/

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