Miami-Dade County waits for FTX Arena decision
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The FTX arena in Mid-November. Photo: Eva Marie Uzcategui/Bloomberg via Getty Images
Miami-Dade County has asked a judge in the FTX bankruptcy case to terminate its deal with the collapsed cryptocurrency exchange over naming rights to the stadium where the Miami Heat play.
Why it matters: If the deal is severed, the county will be free to seek a new sponsor for the venue.
How it started: FTX had agreed to pay $135 million over 19 years for naming rights to the stadium in a deal approved by county commissioners in March 2021, the Wall Street Journal reports. Prior to that, the property was named American Airlines Arena.
- Miami-Dade had started considering a new sponsor after representatives from Superlative Group — a firm that brokers naming-rights deals — told county officials in 2018 that they could earn triple the $2.1 million per year they were receiving from American Airlines, per county records, WSJ reports.
- Miami-Dade hired the firm to scout new sponsorships, and Superlative Group ended up recommending FTX.
Between the lines: Miami-Dade's Office of the Inspector General had examined FTX, its affiliates and its main shareholders before the deal was made, WSJ reports. But the county's inspector general had told Miami-Dade Mayor Daniella Levine Cava at the time that the review "was limited" due to time constraints.
- Inspector general Felix Jimenez also said in the review, obtained by Axios, that due diligence was limited to information contained in publicly available databases.
- The office "did not look at the financial strength of the company or its proposed offer," Jimenez wrote to the mayor, "as we were advised that the financial review was performed by the county's Audit and Management Services Department and the administration."
What they're saying: When asked about additional financial reviews conducted by the county, a spokesperson for Mayor Daniela Levine Cava shared with Axios a memo sent to commissioners before voting on the deal.
- In it, the mayor notes that financial statements from FTX — which were unaudited — showed it had more than $42.7 million in equity and $27.3 million in cash and equivalents at the time.
- Levine Cava wrote that the OIG review didn't determine any "substantial concerns … other than [that] the firm has not been in business for long."
- The spokesperson didn't provide further details.
By the numbers: Of the $135 million, the Heat was to receive $40 million, and Superlative $5.2 million.
- The county was owed the remainder — about $90 million — which was earmarked for gun violence prevention.
- FTX paid $14 million last year and $5.5 million in 2022. Funds were used for police equipment and youth camps and sports.
What's ahead: FTX will owe the county another $5.5 million in January.
- If that is not paid and the naming-rights deal is not severed by then, Miami-Dade will add the amount to the $17 million the county says FTX owes in early termination fees, per WSJ.