Collapse of Crypto Company FTX Forces Heat to Terminate Its Arena Deal; Big Sports Names to Lose Money
FTX Arena no longer exists. The cryptocurrency startup went bankrupt this week, prompting the Miami Heat to say on Friday night that it was discontinuing its partnership with the team. For the arena’s name rights, the 3-time NBA champion is currently looking for a new partner.
“The reports about FTX and its affiliates are extremely disappointing,” the Heat said in a joint statement with Miami-Dade County. “Miami-Dade County and the Miami Heat are immediately taking action to terminate our business with FTX, and we will be working together to find a new naming rights partner for the arena.”
“We are proud of the impact our Peace & Prosperity Plan – sponsored by the County Commissioner Keon Hardemon and funded through the original deal – is already having in preventing violence and creating opportunity for young people across Miami-Dade, and we look forward to identifying a new partner to continue funding these important programs in the years ahead,” the note concluded.
When the Heat will formally rename the arena and what it will be called are both up in the air.
What Happened to FTX?
The Heat arena’s naming rights were acquired by FTX last year in a significant 19-year, $135 million agreement. It was one of many notable sports partnerships that FTX recently made. Last year, MLB umpires wore FTX patches on their jerseys, and other well-known athletes appeared in advertisements and business collaborations.
According to Forbes, FTX is the 5th-largest cryptocurrency exchange in the world. Sam Bankman-Fried, 30, is the company’s CEO and is based in the Bahamas. FTX’s native cryptocurrency token, FTT, which was announced to be sold off by Binance, the largest cryptocurrency exchange in the world, put the company in difficulties this month. That action was taken in response to information that CEO Sam Bankman- Fried’s hedge fund had a sizable holding of FTT tokens despite the two companies’ purported separation.
Following Binance’s sale, FTT’s value plummeted, and others tried to get their money out of FTX. The corporation struggled to handle the roughly $6 billion in withdrawal requests that it received over the course of three days, according to The New York Times. After Binance bailed on a contract to buy FTX, the company then declared bankruptcy.
Los Angeles is the location of the other significant crypto arena in the sports world. Last year, in what is thought to be the biggest deal in American history, Crypto.com paid $700 million for the naming rights to the arena formerly known as the iconic Staples Center. According to Forbes, Singapore-based Crypto.com is the 4rth-largest exchange in the world.
Numerous US and World Sports Stars Who Could Lose Money Due to FTX’s Collapse, Brady Affected Most
Major investors in FTX, which has filed for bankruptcy, include several sports celebrities. The collapse of FTX, which declared bankruptcy and saw Bankman-Fried resign after his assets fell in value from $16 billion at the start of the week to practically nothing, pretty much rocked the cryptocurrency market. The demise of FTX, which had been heralded as a reliable cryptocurrency platform, is expected to have significant ramifications for its investors, many of whom are prominent players in sports on and off the field.
Tom Brady is one such eminent investor. The quarterback of the NHL side Tampa Bay Buccaneers and his ex-wife Gisele Bundchen are among the famous people who have invested in FTX; the two were revealed to have acquired significant stock shares in the business in 2021. Bundchen was chosen as the company’s consultant for environmental and social activities, and he has worked as a brand ambassador and appeared in advertisements for it in exchange for cryptocurrencies. Brady and FTX’s other significant investors are now likely to have lost the majority, if not all, of their investment in the business. This is especially true after a plan for cryptocurrency giant Binance to save FTX fell through following an analysis of the business’s finances.
Curry, O’Neal, Osaka…
Brady is hardly the only athlete or sports personality who will probably suffer a significant financial setback as a result of FTX’s failure. Stephen Curry, a member of the Golden State Warriors and an NBA legend, partnered with FTX last September in exchange for an equity position in the business.
Naomi Osaka, a tennis pro from Japan and former women’s singles No. 1, executed a maneuver akin to what Curry performed in the spring. Shohei Ohtani, a star pitcher for the MLB’s Los Angeles Angels, was also an FTX ambassador. His contract called for him to receive all payments in the form of company stock and cryptocurrencies. These three are among a select group of well-known players having connections to FTX that also includes Dominican David Ortíz of the Boston Red Sox (MLB) Hall of Famers, Trevor Lawrence of the Jacksonville Jaguars (NHL), and NBA legend Shaquille O’Neal. Speaking of Brady, his personal and professional bottom lines have recently taken a knock as a result of FTX’s collapse and its likely impact on his money. Brady and Bundchen revealed they had divorced by the end of the previous month.
Major business and sponsorship agreements between FTX and clubs and leagues are also in place. The Warriors and FTX signed a $10 million international sponsorship agreement in December, providing the brand a significant presence across Chase Center and the team’s NBA 2K and G League squads. Additionally, FTX was a sponsor of the Mercedes Formula 1 team and owned the naming rights, the topic we started the article with, to the Miami Heat’s home arena.
But regardless of what happens in the crypto market and the collapses of exchange companies there, the popularity of crypto gaming, i.e. crypto-friendly gambling sites with no deposit bonuses, will continue to grow due to their transparent wins and losses statistics in the live mode, as well as 100% user-friendliness.