Miami Heat to play in the Kaseya Center under naming-rights deal up for a county vote
The Miami Heat would play in the Kaseya Center under a proposed $117 million naming-rights agreement with a booming software company headquartered in the city’s Brickell Avenue district, according to a proposal released Wednesday evening by county Mayor Daniella Levine Cava.
If approved by Miami-Dade County commissioners next week, the 17-year agreement would mostly match the promised payments that fizzled from the arena’s prior sponsor, the FTX crypto exchange. After signing on as the arena’s sponsor in 2021, FTX collapsed into bankruptcy late last year as its CEO at the time faced fraud allegations that led to criminal charges alleging misuse of customer funds.
READ MORE: Miami tech company in talks to replace FTX as new sponsor for the Miami Heat arena
While not a consumer brand, Kaseya gets attention in global tech. Its hiring announcements claim a $15 billion valuation, and last year it acquired a rival software player for an estimated $6.2 billion.
FTX’s $135 million deal with Miami-Dade was to last 19 years, averaging about $7 million annually, roughly the yearly average for the Kaseya agreement. Because of a nearly $2 million one-time broker’s fee in the FTX agreement and other deductions, Miami-Dade would receive slightly more from Kaseya over the long haul: $4.9 million annually on average, compared to $4.7 million from FTX, according to county figures.
Because MIami-Dade negotiated a front-loaded agreement with FTX in 2021, the company paid out more than $19 million before its bankruptcy under the prior 19-year arena deal. With Kaseya, Miami-Dade would receive $3.5 million more than FTX would have paid over the next 17 years had that crypto exchange’s agreement remained in place, according to the Levine Cava memo.
In both agreements, the Heat receives $2 million annually under the county’s original agreement with the team dating back to the waterfront facility’s opening as the AmericanAirlines Arena in 2000. In 2021, commissioners approved Levine Cava’s plan to use the FTX money to fund programs aimed at reducing gun violence and promoting economic prosperity.
The NBA hasn’t given the green light for the Kaseya agreement, according to the Levine Cava memo, and that might not arrive by the time commissioners are scheduled to vote on the agreement April 4. The sponsorship deal can’t be finalized without league approval.
The agreement would mean a spike in exposure for Kaseya, a privately held company with about 900 employees in Miami spread over four offices in the Brickell Avenue area. The company recently announced plans to hire 3,000 more employees in Miami, securing a pledge of $4.6 million in subsidies from Miami-Dade if the hiring goals are met.
After being burned in the FTX deal, Miami-Dade negotiated a $7.5 million line of credit from Kaseya that would cover 18 months of future naming-rights payments. The company, which sells IT software, has 18 offices in the United States and 14 more worldwide, with 4,500 employees in all. Last year, it paid an estimated $6.2 billion to purchase Datto, then a publicly traded software security company.
In 2021, Kaseya suffered a ransomware attack, with impacts from the hack spreading to about 1,500 businesses globally.
Kaseya was one of at least six companies that had talks with Miami-Dade about naming rights for the county-owned arena, according to the Levine Cava memo. The others weren’t named, but internal emails show Aroma360, a Miami-based producer of home fragrances, and iHeart Media, a radio operator out of San Antonio, Texas, had reached out to the Levine Cava administration after FTX’s legal troubles.
The Kaseya deal came about without the pricey naming-rights broker that landed the FTX agreement. Superlative Group was to collect $5.2 million throughout the life of that deal, but for the Kaseya agreement Miami-Dade would only pay a $45,000 finder’s fee to PFM, a financial advisory firm.
This article was updated to include more financial information related to the comparison of the terms accepted by FTX and Kaseya for naming-rights of the Miami Heat arena.