In 1997, the NBA’s Heat organization signed a deal with Miami-Dade county, which involved an amount of prime waterfront property (estimated to be worth about $38 million) on which an arena was to be built and an annual $6.4 million subsidy for the next 30 years. The Heat paid $240 million for the actual construction of the arena. In return for the county’s help, the Heat organization agreed to share 40 percent of its profits above $14 million. The problem here is that the Miami Heat has yet to report that benchmark in profits. Therefore, the team is being audited and Heat owner Micky Arison is threatening to move the Heat to another city.
In the years before and after the 2005-2006 championship season, Miami recorded yearly lows in ticket sales. This seemed to legitimize the reporting of low annual profits. The strange thing (and very likely the reason why the team is being audited) is that neither the championship season nor last year’s run to the Finals by a star-studded Heat squad bore any fruit from the $14 million branch.
Arison is trying everything within his power to only allow the the Inspector General, Christopher Mazella, access to basic annual statements. Arison’s threat to move the Heat to another city, though very unlikely, holds very real consequences.
Downtown Miami was nowhere near as loud with the sounds of business before the American Airlines Arena was built. One needs only to look to Cleveland to understand the possible consequences of a Heat move.
In fact, the effect would be tenfold. Consider the city of Cleveland and its Cavaliers, LeBron James’s previous team. After a tumultuous and rapid divorce with their star player, the city of Cleveland took an economic hit that can be exemplified by the boarded up windows on some of downtown Cleveland’s restaurants and bars. Now, the city has, since then, stayed at a manageable economic pace because of a surprising number of ticket sales and high crowd numbers.
But, how drastic could a Heat move be for the city of Miami? Some local economists have estimated that the city could be held back to the tune of $10 million annually.
The Heat’s trio of Dwyane Wade, LeBron James and Chris Bosh has caused an amplified effect on the growth of downtown Miami’s restaurants, bars and other surrounding businesses. Though it is very unlikely that Arison will actually move the team, the effect would no doubt cause a period of economic stand-still for the downtown area.