FTX scandal brings ‘hardship’ from Miami Heat arena deal. County asks judge to help

Miami-Dade County is asking a judge to allow it to break the FTX naming-rights agreement for the Miami Heat arena, warning of “significant hardship” if forced to remain associated with the failed crypto company and its scandalous corporate behavior.

The county’s filing Tuesday in bankruptcy court formalizes a Nov. 11 announcement by Mayor Daniella Levine Cava that she intends to scrap the 19-year, $130 million sponsorship agreement her administration negotiated with FTX last year for the county-owned arena.

READ MORE: Miami’s star turn in the crypto boom now has an iconic bust: the Heat’s FTX Arena

The crypto exchange, based in the Bahamas before its collapse into bankruptcy earlier this month, owes Miami-Dade a $5.5 million payment in January, but its finances are a shambles, according to court filings.

Under the terms of the sponsorship agreement, Miami-Dade is entitled to three years of payment if FTX defaults. That’s worth about $17 million according to the county filing in federal bankruptcy court in Delaware, home to the FTX proceedings. FTX has already paid Miami-Dade $20 million, money received before the collapse.

County lawyers said FTX’s apparent violation of laws governing the cryptocurrency exchange constitute a default under the terms of the original deal.

Once FTX filed for Chapter 11 bankruptcy protection, a judge issued an order preventing any entity from taking action against the company — a “stay” that applies to the arena naming-rights deal. Without a court order, Miami-Dade and the Heat are locked into an agreement that has the FTX logo on the arena’s roof and basketball court.

“Significant hardship to the county would result from the maintenance of the stay because it would force the County to continue to be associated with the failed FTX.US company,” the motion reads.

This story was originally published November 22, 2022 at 7:14 PM.