The FTX Arena is no more. As the contagion from the collapse of FTX continues to spread, a Florida judge stripped fallen cryptocurrency exchange FTX of its naming rights to the home of the Miami Heat on Wednesday.
The news comes after a court hearing in the Bankruptcy Court of Delaware, where attorneys told the court that funds from Alameda Research funded the deal with Miami-Dade county.
The county had already received approval to take down FTX signage after the exchange filed for Chapter 11 bankruptcy protection last November. Today’s ruling was made retroactive to Dec. 31, 2022.
Today’s order finalized the parties’ separation, and now allows the owners of the Miami Heat arena to look for new bidders and partnerships on the building.
“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,” legal analyst David Weinstein told Local 10 News. “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.”
Now, Weinstein added, Miami-Dade will have to decide what the county will do with money already received by FTX in the deal or turn the money over to the bankruptcy court 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,” Weinstein said.
The $213 million, 18,000-seat facility opened in 1999 as American Airlines Arena. In March 2021, then FTX CEO Sam Bankman-Fried signed a 19-year contract with Miami-Dade, the arena’s owners, for a $135 million naming rights deal. It would have provided Miami-Dade County with $2 million a year.
The deal raised eyebrows in the industry, not only due to its dollar amount but also the fact that FTX was only two years old at the time, launching in 2019.
“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,” Bankman-Fried told Decrypt during an interview on the GM Podcast. “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.”
Naming rights deals were a popular move for crypto companies before the onset of the 2022 crypto winter.
In November 2021, rival cryptocurrency exchange, Crypto.com, signed a deal worth $700 million with the owners of the then Staples Center, the home of the Los Angeles Lakers and Clippers.
Be the first to comment