The alliance will consist to a series of long-term sponsorships and commercial activities, in addition to the assignment of a new name for the team’s home, soon to be FTX Arena
U.S. cryptocurrency exchange FTX, consolidated a partnership with NBA team the Miami Heat in a long-term alliance that will serve in different commercial and sponsorship areas, including a major deal where the exchange gets the naming rights to the basketball team’s home arena.
In the sports world, the pandemic generated a generalized drop in revenues for most teams without distinction between sports, a fact that sets in motion the desires of institutions to find new forms of financing, especially because of the pandemic, as well as the need to commercially become more financially productive institutions.
If we talk about revenue, sponsorships are one of the most common formulas to see as sources of income for sports teams, and in the case of the sports market in the United States, unlike in Europe, stadium and arena naming rights, also known as naming rights, are often adopted by sports franchises.
Despite being a source of revenue not fully exploited by teams within the world of soccer in Europe, for example, naming rights are common in the United States, where such a sponsorship model could be said to have originated. Eighty percent of Major League Soccer (MLS) clubs, to cite one example, play in stadiums named after a brand, commercial or financial services company.
For its part, stadium naming rights agreements in the NBA, the US professional basketball championship, are seeing the Miami Heat team with a new agreement and one that is linked to the world of cryptocurrencies, as the US exchange FTX, secured a sponsorship alliance with the basketball team, which among other things, includes changing the name of the current AmericanAirlines Arena, the Heat’s home, to FTX Arena.
Weeks ago, the agreement was negotiated by the Miami Heat, FTX and Miami-Dande County, led by Mayor Daniella Levine Cava. In this sense, the AmericanArlines Arena not only hosts the Miami Heat, but it is also a venue for different cultural and entertainment activities, so it required the public-private union for the change, as the county took control of the stadium in exchange for $2 million per year for the NBA team.
The deal was approved in an agreement for the next 19 years, in exchange for $135 million, where Miami-Dande County will secure $90 million for the deal, plus an additional $5 million from FTX, which will serve as development for the community. Miami Mayor Fracis Suarez has made no secret of his interest in Bitcoin and cryptocurrencies in general.
Now, another part of the alliance, now allows for a long-term partnership consolidation between Miami Heat and FTX, which will now become the team’s “official and exclusive cryptocurrency exchange partner,” which is also in addition to the name change to FTX Arena that will begin in the 2021-2022 season, the release describes. The arena sponsorship by a cryptocurrency industry company is the first of its kind for the NBA.
Also, the partnership will not only involve the Miami Heat’s home name change, but will also allow for extended and exclusive sponsorship at different venue locations, digital content, promotional activities, contests, community engagements and more, the announcement notes. Among teams with stadium sponsorships in the NBA, the Toronto Raptors receive the most money at $30 million, notes Statista.
On the other hand, two-year-old U.S.-based cryptocurrency exchange FTX offers cryptocurrency derivatives trading, stock trading, futures, contracts and more, being defined as “a young and exciting company in an emerging category of the financial services industry that continues to grow at lightning speed,” as described by Eric Woolworth, who is president of business operations at The HEAT Group.
In this way, Miami Heat is getting involved with the cryptocurrency sector, and possibly the strategies and agreements in the alliance with FTX, could open space for initiatives linked to the crypto world for the NBA team. Although, for the moment, there will be no acceptance of cryptocurrency payments, as Woolworth said in an interview with El Nuevo Herald.