Bye, AA Arena? FTX Bitcoin exchange may win namingrights deal
The FTX Bitcoin exchange lands a sponsorship agreement for the Miami Heat arena in downtown Miami — but needs final approval from the Miami-Dade Commission.
The FTX cryptocurrency exchange is one vote away from winning a namingrights deal for the Miami Heat’s arena, with a Miami-Dade County Commission meeting called for Friday to approve the agreement.
Miami-Dade has already officially announced the March 26 meeting to vote on the sponsorship agreement at the county-owned arena in downtown Miami. Details haven’t been released. After two decades as AmericanAirlines Arena, the venue would be renamed the FTX
Arena and the iconic American plane image stripped from the roof.
The deal would mean an undisclosed amount of yearly payments from FTX to Miami-Dade, which controls the naming rights for the building while the Heat sells the other sponsorships in the arena. Miami-Dade collects all of the naming-rights revenue but must pay the Heat $2 million a year under an option the county exercised in 2018 to find the arena’s next sponsor.
County documents calling for the meeting were circulating over the weekend, and a legal notice of the Friday session was posted online March 19. The notices don’t mention FTX, but only say the vote will be for “selling naming rights and other benefits ... for the Arena.”
The Miami Herald first reported on the pending FTX deal on March 12. Multiple sources confirmed FTX has negotiated final agreements with MiamiDade and only needs legislative approval to put its name outside the Heat arena.
If approved, the agreement would bring the NBA its first arena sponsor for the crypto industry, and inject FTX into the Miami sports vocabulary at a time when the city’s mayor is courting tech executives and embracing Bitcoin.
The deal would also lash a county revenue stream to a U.S. crypto exchange that only launched last year, run by a 29-year-old CEO now reported to be one of the world’s wealthiest “blockchain billionaires.”
CEO Samuel BankmanFried oversees two exchanges: FTX, based in Hong Kong, and FTX US, which operates out of California, according to county
research. The arena deal will carry the brand FTX but be owned by the holding company behind FTX US, West Realm Shires Services. Bankman-Fried owns 58% of West Realm, according to a March 17 report by the county’s inspector general’s office, which routinely researches large contracts.
WHO IS SAMUEL BANKMAN-FRIED?
Bankman-Fried worked
in San Francisco as a crypto trader before moving to Hong Kong, according to media accounts. He does not own real estate in the Miami area, the OIG report said. The sponsorship deal gives FTX premier access to Heat games, including four courtside seats and a luxury suite.
A 2014 graduate of the Massachusetts Institute of Technology, BankmanFried made a fortune trading Bitcoin and other cryptocurrencies
before launching his own exchange to collect a fee from trades around the world.
He wound up second on the list of President Joe Biden’s CEO donors in 2020, behind Michael Bloomberg. A February profile in the Intelligencer called him the “mystery cryptocurrency magnate,” and a March post on decrypt.com pegged Bankman-Fried’s net worth at $10 billion.
The trading firm he founded in 2017 and still owns, Alameda Research out of California, reports trading more than $1 billion in crytpocurrencies on some days.
FTX’s arrival coincides with a historic plunge in the hotel taxes that are supposed to fund the county’s arena expenses. Revenues are down about 50% countywide, and MiamiDade’s finance arm is warning the county will have to use reserves or even general tax dollars to cover hotel-tax expenses until federal relief money can be used to replace the lost dollars.
“I have been here for 32 years, and I’m not aware that we’ve ever been in a situation where tourist-tax dollars were so stretched,” said budget director David Clodfelter. “We’ve raised the red flag.”
THIS IS THE COUNTY’S DEAL
While the Heat has the right to most sponsorship dollars inside the arena, Miami-Dade exercised its option in 2018 to take over naming-rights talks for the venue itself.
Miami-Dade hired Cleveland’s Superlative Group to find the new sponsor, a hunt that had turned up empty when the pandemic hit in early 2020 and the Heat sent the county a $2 million bill for the naming-rights payment it was guaranteed under the new arrangement.
County administrators won delays on paying the bill — now at $4 million, with 2021 marking the second year without a sponsor for the arena.
Heat lobbyists opposed the 2018 naming-rights move, warning the county risked falling short of the kind of sponsorship partner the team could land with its expertise and ability to negotiate side marketing agreements within the arena. While the Heat was trying to extend American, the airline announced in 2019 it wasn’t interested in staying once its $2-milliona-year deal ended in 2020.
At the moment, the only major sports venue in Miami-Dade with a naming-rights sponsor is the privately owned Miami Dolphins stadium. It’s named after the Hard Rock casino hotel. Marlins Park remains without a sponsor.