Kishner Discusses Arena Naming Rights in Light of Cryptocurrency Market Issues
Irwin Kishner, co-chair of Herrick's Sports Law Group, spoke to the Los Angeles Times about the status of the sale of the Miami Heat arena's naming rights to FTX following the FTX Group's recent Chapter 11 bankruptcy filing. In March 2021, the team announced that it sold the arena's naming rights to FTX. Following the recently filed bankruptcy, Miami-Dade County, which owns the arena that the Heat play in, announced that it would terminate their business relationship with FTX and seek a new naming rights partner.
The article notes that before crypto pricing began falling a year ago, and for months after, "the sector's biggest companies viewed sports marketing as a key avenue to building consumer awareness and claiming market share." The article further discusses that several crypto companies spent large amounts on Superbowl ads, sponsorships and the renaming of the Staples Center in Los Angles to Crypto.com.
With the current bankruptcy, and fears about a "domino-like run on exchanges and currencies, the decision by major sports entities to hitch their brands to crypto currencies is coming in for fresh scrutiny."
“Any time you enter into a long-term deal, you obviously need to assess the financial wherewithal or creditworthiness of your counterpart,” said Irwin. “The obvious question is: ‘What’s the long-term viability of crypto as a product group and its ability to make its committed payments?"
Read the full article in the Los Angeles Times here. Access may require a subscription.