FTX, the bankrupt cryptocurrency exchange, conducted numerous deals with sports franchises in 2021, but now teams are slashing their connections rapidly.
The Miami Heat is the first one to cut its ties with the Bahamian-based brokerage.
In 2021, FTX agreed to a 19-year deal to pay $135 million to change the name of the home of the NBA's Miami Heat to FTX Arena. It had been named the American Airlines Arena since 1999 after it opened.
The naming-rights holder for the Heat arena, the franchise and Miami-Dade County released a joint statement on Nov. 11, stating that it would “take action immediately to terminate” its relationship with FTX.
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The team plans to “seek a new naming rights partner” for Miami’s venue, per according to the statement.
“The reports about FTX and its affiliates are extremely disappointing," the team said. "Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena."
The splashy endorsement and sponsorship deals by FTX are now in doubt as cryptocurrency exchange filed for bankruptcy on Nov. 11 and its founder and CEO, Sam Bankman-Fried also resigned.
The venue will keep the FTX Arena name until Saturday night’s game against the Hornets, Sports Illustrated reported.
Sports teams had welcomed the multi-million dollar partnerships in 2021 from cryptocurrency companies like FTX.
The future of all those partnerships are up in the air, but not likely to continue since FTX is insolvent.
Investors have been wary in the past of companies purchasing naming rights to stadiums because of the large investment. Many of those those deals involving naming rights appear to be cursed and the companies who spent hundreds of millions of dollars wind up filing for bankruptcy protection later on.
FTX's deal ran the spectrum from Major League Baseball to Formula One, a major auto racing competition.
FTX, which was founded in 2019 by Sam Bankman-Fried, invested and partnered with various sports teams, including Major League Baseball, only two years later, spending millions of dollars.
In June 2021, MLB, which includes the 30 baseball teams in the U.S., chose FTX as its official cryptocurrency exchange brand in a five-year deal.
Bankman-Fried's sponsorship of major sports teams and athletes includes Los Angeles Angels Shohei Ohtani, a double threat superstar as a pitcher and a hitter. He was chosen as FTX's global ambassador last November. He received a stake in the company in return, the founder told CNN.
Ohtani's compensation was paid by an undisclosed amount of equity in FTX and in cryptocurrency.
FTX also got involved in the world of auto racing by serving as the first cryptocurrency exchange partner of the Mercedes-AMG Petronas Formula One Team. The partnership included motorsport fans being able to trade crypto through the FTX app, buy sell and create NFTs using the FTX NFT marketplace and pay for daily purchases with crypto through FTX Pay.
The partnership allowed FTX to feature its logo on both the Formula One cars and the drivers' racing suits and attire.
Brady, Bündchen, Curry Signed Deals
Basketball star Stephen Curry also signed a partnership with FTX in September 2021, which was his first investment in the crypto industry. Curry, who plays for the Golden State Warriors, tweeted about the deal, stating "Just getting started in the crypto game...y'all got any advice??'
Football superstar Tom Brady and model Gisele Bündchen also have an equity stake in FTX and served as ambassadors for FTX.
The equity stake was not disclosed, but FTX said they would receive an unspecified amount and type of crypto.
In August 2021, the University of California Golden Bears signed a 10-year, $17.5 million naming rights deal with FTX.
