FTX Owes Miami $16.5M For Arena Sponsorship Cancellation
The contract between FTX and Miami-Dade County says FTX must pay the County three years of fees in the event of default.
FTX owes Miami-Dade County, the owners of the facility formerly known as FTX arena, $16.5 million, according to a contract signed last year between the bankrupt exchange.
According to the contract, the $135 million deal is amortized over 19 years. The contract also says that in the event of a default by FTX, which includes an “insolvency event”, the exchange will be liable to pay three years of contract fees, within 60 days. After paying $14 million during signing of the contract, FTX will now be liable to pay $16.5 million for the subsequent three years. If the payment is not paid within ten business days, the County says it has the rights to charge 12% interest per anum until the payment is made.
In the first year, the exchange paid the County $14 million, while between years 2-4, it owes an annual fee of $5.5 million. In year 5, it owes $6 million, and by year 10, it owes $7 million, then $8 million by year 19.
Late Friday, the County and the Miami Heat announced that they had terminated the relationship with FTX because of its bankruptcy.
"The reports about FTX and its affiliates are extremely disappointing. 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," a press statement issued Friday reads.
FTX will also be liable for the removal of all signage and decorations in the arena.
UPDATE (Nov. 12, 12:30 UTC): Updates headline.
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