After the failed crypto exchange FTX filed for bankruptcy, the Miami Heat launched an effort to find a new naming rights partner. It’s a difficult task at best, according to one expert who has negotiated naming rights deals in the past.
The Heat had signed a 19-year, $135 million deal to have the arena renamed FTX Arena in June 2021. The team was set to receive $2 million per year from the deal, while most of the remaining revenue would go to the county in efforts to fight gun violence and poverty.
Miami-Dade Arena
In the aftermath of the FTX debacle, the Miami Heat have launched a search for a new naming rights partner. They have temporarily renamed the arena to Miami-Dade Arena, and that will be the name of the venue until a new naming rights partner can be found.
The county owns the building and negotiated what was to be a 19-year, $135 million naming rights deal with FTX. It was due to pay the Miami Heat $2 million per year, and FTX’s branding would be on the court and throughout the arena.
But on Wednesday, a federal bankruptcy judge said the rights deal should be terminated because of allegations involving former CEO Sam Bankman-Fried and the company’s mishandling of funds. As NPR reports, FTX’s collapsed last year after Bankman-Fried revealed that he had misappropriated up to $10 billion in investor money.
This led to an investigation that resulted in the arrest and conviction of Bankman-Fried on fraud, money laundering and campaign finance violations. He is currently out on bond, serving house arrest at his parent’s Palo Alto, California, home.
As NPR reports, Miami-Dade County and the NBA team formally ended their sponsorship of FTX on Friday. In a statement, they announced the temporary name: “Effective immediately, Miami-Dade County and the Miami Heat have agreed that until such time as there is a new naming rights partner, to refer to the arena as Miami-Dade Arena,” according to the county’s statement.
A spokesman for the Heat confirmed the change on Friday and said it would not affect their upcoming games in the arena. It’s unclear when a new naming rights partner will be found or what the name will be, but that is still underway.
The naming rights deal with FTX was approved in June 2021 and the agreement called for a $5.5 million payment to the county on January 1, 2023. It also allowed FTX to advertise on the roof of the building, on the basketball court and throughout the arena.
The county has asked a bankruptcy judge to terminate the FTX-Miami-Dade naming rights deal and remove all signage and advertisements featuring the FTX logo from the arena. This will be a huge project, as the name is currently plastered on the arena’s roof, its basketball court, its staff work attire and the advertising that runs throughout the arena.
TSM FTX
The Miami Heat is on the hunt for a new naming rights partner to replace Hong Kong-based cryptocurrency exchange FTX, which filed for bankruptcy last week. The Heat’s arena, renamed FTX Arena in 2021, had a $135 million naming rights deal with the exchange in place.
The Heat’s search for a new naming rights partner is not the only one underway in esports following the FTX debacle. The popular esports organization Team SoloMid (TSM), which signed a $210 million naming rights deal with the crypto company in June 2021, has suspended its partnership with FTX after the exchange collapsed into bankruptcy this week.
In a statement on Twitter, TSM said that they “suspended our partnership with FTX immediately” and that the FTX brand will not appear on any of their team social media profiles or jerseys going forward. They added that they would be monitoring the situation closely and that it may take some time for fans to see the changes in their social media feeds.
TSM’s suspension is the latest in a long line of major sports brands that have cut ties with FTX. The NBA’s Golden State Warriors, the National Basketball Association’s Miami Heat, the Mercedes Formula One team and GameStop have all cut ties with FTX in the wake of its bankruptcy filing.
FTX, which was founded by crypto entrepreneur Sam Bankman-Fried and is headquartered in Hong Kong, is best known for its involvement in the esports scene. It was a title sponsor of Riot Games’ League of Legends Championship Series and a major partner of Brazilian esports organization FURIA.
As recently reported by Dot Esports, TSM was not allowed to use the FTX name on their players’ broadcasts due to Riot Games’ restrictions on crypto sponsorships. While it did not break any LCS rules, crypto exchanges fall into a category of sponsorship that Riot considers to be “risky” in its public event licensing guidelines.
While TSM’s suspension of its partnership with FTX will not have a significant impact on their operations, it could lead to other teams following in its footsteps. The Miami Heat has announced that it will launch a search for a new naming rights partner for its arena after the FTX debacle, and Major League Baseball and UC Berkeley’s football stadium might be among those that follow TSM’s example.
Team SoloMid
After the FTX debacle, the Miami Heat launched search for a new naming rights partner. The Heat had previously partnered with FTX for their arena, but the company filed for bankruptcy and its CEO stepped down. As a result, many payment companies stopped processing FTX cards and Visa broke off an agreement to provide the company with debit card options worldwide.
The FTX collapse has made many people think about the potential risks of crypto sponsorships. There are a lot of companies that have suddenly failed because of the lack of regulation in the industry, and this week’s collapse in FTX shows just how fickle these partnerships can be.
While esports teams have been more at risk than other companies, they’ve also been less mature and established as a sector. This is especially true when compared to more traditional industries such as sports, which have long been stable and known for their reputations within those industries.
Nevertheless, these kinds of issues can impact the brand and reputation of an esports team much more quickly than they would in a traditionally more well-established business or a company like a Miami Heat or Mercedes. That’s because esports organizations don’t have the same level of brand recognition that a Miami Heat or a Mercedes does, and so they may have to work far harder to recover from these types of challenges.
That’s why many esports organizations have been moving away from these types of deals, while other teams are still working on them. Among these organizations is TSM, who announced they’d be moving away from their FTX partnership earlier this month.
As a result, TSM’s FTX branded apparel will no longer be available to fans. Instead, fans will see the organization’s original name and logo.
TSM’s esports team has been successful over the years, capturing championships in seven different NA LCS splits and winning an EVO Championship. In addition to their esports endeavors, TSM has been active in other areas of the gaming world as well, including Fortnite and PUBG Mobile.
TSM has also donated a considerable amount of money to charities over the years. Some of these donations have gone towards helping disadvantaged youths in Asia and Africa. They’ve also organized a number of charity tournaments, with all the proceeds going to help disadvantaged children.
UC Berkeley
The Miami Heat launched a search for a new naming rights partner after the debacle of cryptocurrency exchange FTX. The exchange, short billions of dollars, sought bankruptcy protection in Delaware on Friday after it experienced the crypto equivalent of a bank run.
As FTX surged in popularity in 2021, it racked up some of the industry’s most prominent sports marketing deals. The company’s high-profile founder, Sam Bankman-Fried, poured millions of dollars into sponsorships that included partnerships with teams in baseball and basketball, as well as sports leagues like MLB.
But the company’s soaring success was based on an ill-conceived business model and a culture of excess. Bankman-Fried hid the true nature of his company’s finances within a circle of friends who partied together and dated one another, leaving even its highest-level executives in the dark about the financial problems that plagued the exchange.
It wasn’t long before FTX had to file for bankruptcy, after the exchange was hit with a record $6 billion in withdrawal requests over a three-day period. The collapse of the company has thrown a shadow over all of its major sports and esports partners, and a number of companies that partnered with FTX are now on the verge of filing legal challenges to undo their once-valuable deals.
The Golden State Warriors became the second NBA team to cut ties with FTX after the exchange filed for bankruptcy, suspending its relationship in November. The team said it was unsure whether the move had anything to do with FTX’s collapse, but it appears that it did.
UC Berkeley also announced that it had ended its $17.5-million naming rights deal with FTX, which was in place since August 2021. That agreement was brokered by Learfield, a college sports marketing company that represents more than 200 of the nation’s top collegiate properties.
UC Berkeley’s athletics department also said it would be looking for a new naming rights partner for California Memorial Stadium. While the school’s stadium is no longer branded with FTX’s logos, the company will remain on Cal’s website and in its athletic department’s press room.
