KASEYA WITH A K: Officials with the Miami Heat, Miami-Dade County and Kaseya celebrate the company’s naming-rights deal for the NBA arena. (Courtesy venue)
Bad news is good news for arena rebrand
There’s a silver lining for everything if you look close enough. For the Miami Heat, the inglorious exit of FTX, the cryptocurrency exchange that held naming rights to the NBA arena before abruptly going bankrupt in November, the news exploded virally and ultimately created demand among other companies interested in taking over the agreement, according to team officials.
In the end, Kaseya Center is the arena’s new name, announced April 4. Under terms of the deal, Kaseya committed to spending $117 million over the next 17 years for naming rights, which equates to just under $7 million annually. It’s a respectable figure, considering the circumstances, said sports marketer Rob Yowell.
Kaseya essentially steps into FTX’s role in terms of the dollar value, plus a “little bit more” cash, said John Vidalin, the Heat’s executive vice president and chief commercial officer and principally involved in the negotiations. The term is tied to the number of years left on the team’s arena lease with Miami-Dade County. The agreement expands brand awareness for Kaseya, a thriving IT software firm headquartered in Miami, with plans to expand its local base from 900 full-time employees to 3,000 over the next few years.
FTX held the naming rights for about 20 months before it quickly folded.
“It’s not every day that your naming-rights partner not only goes into bankruptcy, but into the international corporate hall of shame,” said Eric Woolworth, the Heat’s president of business operations. “We were all as surprised as the rest of the world. But being on the front page of every newspaper was pretty good advertising for us. We got a lot of interest. A bunch of it was people looking for deals and thought we would be in a distressed situation, which is not the way we viewed it at all.”
Vidalin said, “The media did us a huge favor by telling the story over and over again, which meant a lot of in-bound activity.”
The timing was perfect for Kaseya, a 23-year-old, privately held company with 48,000 customers across 25 countries.
The rebrand became official four days before UFC 287 took place at Kaseya Center. The event drew 19,032 in attendance with $11.9 million in gross ticket sales. To date, it’s the highest-grossing event in the arena’s history, said Heat spokesman Lorenzo Butler. The building is in the midst of resetting its top five grossing events with three huge concerts coming up this summer: Drake (June 28) and Madonna (Sept. 9-10).
For UFC, the Kaseya Center brand generated more than $3.9 million in value during the pay-per-view and streaming productions, extending to the arena’s name on the horizontal turnbuckle in the octagon, said Eric Smallwood, a consultant with Apex Marketing Group.
“Miami is a really hot market right now and we’re in good position to capitalize on it,” Woolworth said.
It didn’t come that easy. Complicating the issue of starting a new search for naming rights is the fact that Miami-Dade County controls that process as part of the original deal signed with the Heat in 1997 to build the facility, which opened in 1999 as AmericanAirlines Arena, a deal done by the the team. The county exercised its option in 2018 to take over naming rights in exchange for paying the Heat $2 million a year.
Those terms remain intact under the Kaseya deal. It remains a quirky clause among the dozens of naming-rights agreements at the big league level. To date, Woolworth said the Heat have been unsuccessful in their attempts to take back control of that lucrative revenue stream.
Still, the partnership between the Heat and the county worked as intended in terms of getting a new deal done as quickly as possible to move past the FTX debacle. Vidalin took the lead with Kaseya and Woolworth worked the county relationship. Previously, the county used a consultant, The Superlative Group, to help broker the FTX deal.
“We did it all in-house,” Vidalin said. “The county was helpful and transparent. We worked well together to get it done.”
Kaseya proved to be the right fit for both parties, Woolworth said. The company already serves as presenting sponsor for Bounce Back from Cancer initiative, tied to a partnership between the Heat and Baptist Health South Florida that has raised $6.4 million for cancer research since 2019.
That deal led to Kaseya officials reaching out to the Heat and the county about acquiring naming rights to the arena, Vidalin said.
Part of the naming rights money helps fund the county’s Peace and Prosperity plan that fights gun violence in various communities across the county.
“To the county’s credit, they identified Kaseya early on as a company they were interested in because they’re local and doing a lot of things in the community,” Woolworth said. “That makes it a nicer thing, to say to folks that live in Miami-Dade County and vote for the county commissioners and the mayor, that they went with a firm that hires a lot of people in Miami.”
Woolworth also gave credit to Vidalin and the Heat’s marketing team to secure a deal in less than six months. There were other candidates in the mix from the previous search that ended up with FTX being selected. This time around, Vidalin said some couldn’t make it work due to category conflicts with with existing Heat sponsors, or they couldn’t agree on the term and dollar amount.
“Kaseya is planting a flag here and telling a great story about building a business in Miami,” he said.