How is FTX bankruptcy saga related to Miami Heat? All you need to know

The Miami Heat have been playing in the FTX Arena since 1999 back when it was still called the American Airlines Arena.

The arena's naming rights cost $135 million and were purchased by the cryptocurrency exchange FTX in March 2021. The deal was accepted by the NBA in early April, and the FTX Arena moniker was officially given to the venue in June 2021.

However, due to FTX suddenly going through bankruptcy this November, the Miami Heat are now terminating their naming rights.

According to ESPN, the arena was still technically referred to as FTX Arena for Saturday's game between the Heat and Charlotte Hornets. Miami is currently working on soon taking down everything related to the cryptocurrency in the arena.

"The reports about FTX and its affiliates are extremely disappointing," the county and team said in a joint statement. "Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX. We will be working together to find a new naming rights partner for the arena."

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Why is the Miami Heat parting way with FTX?

The Miami Heat arena's name rights were acquired by FTX last year in a significant 19-year, $135 million deal, according to Yahoo Sports. It was just one of numerous significant sports acquisitions that FTX recently made.

Last season, MLB umpires sported an FTX patch on their uniforms, and a number of well-known sports figures appeared in advertisements and collaborations.

One of several sports marketing agreements FTX had made over the previous few years included sponsorship agreements with the Golden State Warriors and Washington Wizards in addition to the Miami arrangement. Top sportsmen with FTX contracts included tennis champion Naomi Osaka, Warriors guard Steph Curry, and Tampa Bay Buccaneers quarterback Tom Brady.

According to Forbes, FTX is the fifth-largest cryptocurrency exchange in the world. Binance, the world's largest cryptocurrency exchange, said it will sell all of its FTT tokens—the native cryptocurrency token used by FTX. This led to the company running into problems this month.

Following Binance's sale, FTT's value plummeted, while 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.

Given the nature of how volatile the crypto market is, the future is uncertain for other crypto arenas. The LA Lakers' arena is also under the crypto company Crypto.com.

It wouldn't be surprising if something similar happened in LA in the near future. Sports teams might want to reconsider partnering with cryptocurrencies after a terrible outcome with the Miami Heat.