Home Business Governance Miami Heat “Fans” Should Celebrate Since They are Paying for the Parade

Miami Heat “Fans” Should Celebrate Since They are Paying for the Parade


Two items of interest will be overlooked when Miami hosts a parade for the National Basketball Association’s Miami Heat which should be addressed while the celebration takes place. They are the definition of “fans” and government subsidies to sports teams’ owners.

Miami Heat player Chris Bosh told the “fans” who fled the Heat’s home arena when it appeared the team was on the verge of losing game six and the NBA championship to San Antonio to stay home for game seven.

Miami heat fans celebrate NBA championship with a parade.

Bosh needs to know a bit more about “fans” as does the media and fans themselves. Sports teams no longer look for fans. Instead they want customers willing to pay big dollars for entertainment that once was within the economic realities for people going on dates or family outings. Today’s “fan” in so many cases is a customer willing to shell out money with only a foggy notion of why he or she is at a game other than to be seen.

“You never give up,” Bosh told the media after the sixth game. “People gave up on us, and they can stay where they are and watch the game at home.”

Bosh is half right in his assessment. The real “fan” is probably at home watching the game because the ticket prices are so high.

But there is a justification for the high prices and looking for customers instead of fans. Former President George W. Bush Press Secretary Ari Fleischer in a 2008 conversation with this reporter laid it out perfectly. The message was simple: customers pay the bills and subsidize the “real fan” who scrapes together money for an occasional game.

In a championship series, there are no cheap seats. The high rollers who make up the corporate crowd have an advantage over the fan. They get a tax break and can write off a certain percentage of the ticket cost as a business expense.

Subsequently, sports now has a crowd that in many cases wonders why they are at an event. The customers know the game is important but in some cases are confused in very basic areas including when to cheer. So the customer watches a big screen video board, which in between commercials and various videos, tells them when to cheer.

There is huge money to be made with the video boards in arenas. Although the line is that owners want to enhance the fan experience.

Fans don’t count much. In NBA Commissioner David Stern’s thinking, which he expressed to this reporter many years ago, there are three franchise basics. A franchise needs government support, a great local cable TV deal and great corporate support.

Miami Heat owner Micky Arison knows all about government support. He, according to the Miami Herald, is talking with Miami city officials about getting some taxpayers money for “improvements” to the team’s arena. Arison’s team started playing in its current 13-year-old arena right after New Year’s Day 2000.

Miami got an NBA franchise in 1987 based on the fact the city was building an arena on the public dime. The basketball team started play in 1988.

The Miami Arena was built with Florida public funds and opened in 1988. Looking back, the cost of the arena was cheap; its sticker price was $53 million. Within two years, NBA Commissioner David Stern was wondering out loud why his league bothered to put a team in an inadequate arena that lacked high-revenue-generating luxury boxes and high-end seating. The National Hockey League’s Florida Panthers moved into a new building in Sunrise in 1998, and the Miami Heat was in a new arena the following year.

The Miami Arena was done as a serious entertainment spot by 2000.

In 2004, the Miami Arena website still listed upcoming events but there was a ribbon that ran across the site screaming out. “The Miami Arena, former home of the Miami Heat and Florida Panthers, will be auctioned off on August 10, 2004 in ‘as is’ condition. The minimum purchase price is $25,000,100. The auction will be organized by Fisher Auction Co., Inc. of Pompano Beach, Florida.”

For $25 million, 100 dollars, someone could have owned a useless structure that would have had to be razed by the highest bidder. Miami wasn’t going to use that $25,000,100 to pay off the arena’s remaining debts. Nope, the plan was to use that money to help fund a proposed “Miami” Marlins baseball park.

The Heat ownership put up some of the funding for its $241.3 million arena. But local taxpayers are still responsible for about $142 million, or 59 percent of its cost. The Panthers moved north of the city to a $212 million arena, and Broward County residents are picking up about $184 million, or 87 percent of the total cost. In both cases, local municipalities are paying off the debt through hotel/motel and rental-car taxes.

While it is thought that mainly tourists are paying for stadiums and arenas, Kansas City, Mo., car-rental agents say there is a flaw in that theory. The agents opposed Kansas City’s attempts to build a new indoor arena by using car-rental tax money claimed more local residents rented cars than tourists because locals needed replacement cars after auto accidents. The locals would be forced to pay higher fees for car replacements that are picked up by insurance companies and the insurance companies than raise local rates for their drivers.

Sports arenas and stadiums have a limited shelf life. All of the stadiums and arenas built in the late 1980s and early 1990s are entering their middle-age phase. A stadium or an arena now lasts about 20 years, not 50 or 60 or 100 years.

Today there is some sort of plan to replace the old Miami arena with a convention center and a hotel. The land is being used as a park with skate boarding the leading sports activity there.

Arison’s team gets about $6.4 million annually from Miami-Dade to pay building expenses. The franchise has a deal with the city through 2029 and in exchange, the franchise, which runs the building, is supposed to pay Miami-Dade a stipend. The franchise has never given any money to the government. Now the team is asking Miami-Dade elected officials to increase that annual subsidy to as much as $17 million a year. The team would be willing to extend the lease for the building with Miami-Dade officials. The franchise’s agreement with the airlines that has naming rights to the building ends in 2019 and Miami-Dade officials may have to chip in more money should the team not be able to find a naming rights partner.

Arison has not issued a threat in terms of moving the franchise. He is stuck because of his lease for another 16 years. So he is looking for aid to make sure the building, with renovations, remains a 21st century facility.

Miami-Dade has been pumping money into sports for two decades and has built two indoor arenas along with a baseball park for the Miami Marlins franchise. The National Football League’s Miami Dolphins ownership group is still trying to figure out how they can get a hold of a quarter of a billion dollars in Miami-Dade taxpayers’ money to make improvements to the team’s facility. The Heat and Dolphins franchises also get annual stipends from the state of Florida to supplement team revenues through a $2 million annual tax rebate.

Major League Baseball’s Tampa Bay Rays, the NFL’s Tampa Bay Buccaneers, the National Hockey League’s Tampa Bay Lightning and the Florida Panthers, along with the NBA’s Orlando Magic get subsidies.

The Miami Heat championship parade, which is corporately sponsored, gives the “real fans,” the ones that Bosh apparently thinks left game six, an opportunity to celebrate. And celebrate they should because they are paying for more than just the opportunity to get a ticket to a basketball game. They are subsidizing the business because elected officials think sports is an economic generator and improves the local economy.

Arison can ask for whatever he wants, but the politicians are the ones who decide whether it is good for business. In many cases, such as the building of the original Miami Arena, the politicians have shown remarkably bad judgment.

Evan Weiner, the United States Sports Academy’s 2010 Ronald Reagan Media Award winner, can be reached at evanjweiner@gmail.com. His e-books, “America’s Passion: How a Coal Miner’s Game Became the NFL in the 20th Century,” “From Peach Baskets to Dance Halls and the Not-so-Stern NBA,” and “The Business and Politics of Sports” are available at www.bickley.com, Amazon.com, www.smashwords.com, iTunes, Nook, Versent Books, Kobo, Sony reader and Diesel.


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