Martha Lavandier / AP
In the wake of the collapse of FTX, Miami-Dade County wants to remove the now bankrupt cryptocurrency exchange’s logo from its sports arena, where the NBA’s Miami Heat play their home games.
The county, which owns the arena, has asked a federal judge to terminate the 19-year, $135 million naming rights deal with FTX, in an application filed Tuesday with a Delaware court where FTX bankruptcy proceedings are in progress. 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 sponsor for the arena.
FTX founder Sam Bankman-Fried and his company are under investigation by the Department of Justice and the Securities and Exchange Commission for alleged mishandling of client funds, much of which may have been diverted to Bankman-Fried’s hedge fund, Alameda Research.
After FTX filed for bankruptcy protection on November 11, a judge issued a “cessation” order barring any entity from acting against the company, including the desired termination of its sponsorship agreement from Miami-Dade.
A hearing for the case is scheduled for December 16. Unless a court grants the county relief from the stay order, Miami-Dade and the Heat will remain tied to the deal that began last year.
FTX has already paid Miami-Dade nearly $20 million, and has $5.5 million due in January. Under the terms of the deal, a default by FTX would require the company to pay the county for three years. That amounts to $17 million, and the county is seeking damages, according to the district court lawsuit.
The company 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 the crypto company has been running on local game broadcasts.
Under Bankman-Fried, the Bahamas-based FTX has quickly grown into the third largest cryptocurrency exchange, and was recently valued at nearly $30 billion. Branding and good press helped portray the 30-year-old entrepreneur as a promising leader who could legitimize an obscure and largely unregulated industry.
The Miami Heat deal was just one of several sports sponsorship contracts signed by FTX, according to Decrypt. In 2021 alone, the crypto company has deals with Major League Baseball, the Golden State Warriors, the Washington Wizards of the NBA, the Washington Capitals of the NHL, and esports giant TSM.
In an interview with the cryptocurrency news outlet that year, then-CEO Bankman-Fred was asked how his two-year-old company had the long-term stability needed to fulfill a nearly 20-year deal.
“Without going into detail, it was a good year for us,” Bankman Fried said. “So much so that, frankly, we don’t need to count on the other 18 years to get the money for it.”
A year and a half later, his firm owes creditors more than $3 billion, while new leadership struggles to explain the disappearance of an unknown amount of client funds.