|Excited Miami Heat fans lined the parade route along Biscayne Blvd. Monday. |
Photograph by George Martinez for Miami New Times.
Hey, we love to party, don't we?
And "we" sure threw a party for "our" Miami Heat, today...didn't we?
But as I watched bits and pieces of today's love fest, not one TV talking head bothered to remind viewers that the American Airlines Arena where the Heat play, is essentially "a playground for millionaire athletes and their billionaire owner."
That's how CBS4's Jim DeFede described the Triple A in 2011 when he reported "in the late Nineties as the Heat’s owner Micky Arison lobbied for a new arena, he sweetened the deal for county officials by promising that if the arena generated more than $14 million a year in profit they would share 40 percent of that money with the county."
But DeFede discovered that...
...in the last eleven years, Miami-Dade County has not received a single penny from the Miami Heat under the revenue sharing provision of their arena contract.That last sentence is important. Because that's exactly what a Miami-Dade inspector general’s audit concluded in a report released last month.
According to the financial statements the Miami Heat provides to the county every year, the arena just isn’t profitable enough – at least not on paper.
Last year, the arena generated more than $53 million in revenue – that includes everything from those over priced hot dogs to the luxury suites that circle the court to the $6.4 million in subsidies county taxpayers provide. This includes revenue that comes in not only for Heat games, but also concerts, the circus and corporate events.
On the other side of the ledger, the arena showed $32 million in expenses.
Now you might think that means they had $21 million in profit last year and the county was therefore entitled to some of that money. But unfortunately for Dade County the Heat took a $14 million in amortized arena costs.
What is that? Well, CBS4 asked the county that question, a county spokeswoman sent us the following response:
"County staff cannot answer why Basketball Property Limited (BPL) amortizes items as they appear in the financial statements. You can contact Eric Woolworth, President of Business Operations, Basketball Properties Ltd., for clarification."
The most fascinating aspect of that answer is the willingness of the county to simply abdicate any responsibility they might have in making sure they are not losing a possible source of money.
From the Miami Herald:
A Miami-Dade inspector general’s audit of the AmericanAirlines Arena operating agreement with the Miami Heat blasts the county for “poorly performing” administrative oversight and paying little attention to the Heat’s annual budget.So, who's to blame for this fiasco?
The pointed, 60-page document released Thursday faults Miami-Dade for having “little idea” about whether the team has met financial benchmarks that would trigger profit-sharing from the county-owned arena.
Though the Heat’s operating budget is consistently submitted late, it has never faced repercussions from the county. And the county apparently wasn’t aware the Heat was required to submit an annual budget for big-ticket capital expenditures, the audit states.
“The county’s hands-off approach to an operation that now generates more than $60 million a year is perplexing, especially an operation that has yet to produce sufficient profits to result in profit-sharing,” Inspector General Christopher Mazzella wrote.
Miami-Dade Mayor Carlos Gimenez says don't blame him.
“We found out really the previous administration did not have the proper oversight, when the reports came in nobody looked at them, nobody questioned them,” the mayor told CBS4’s Jim DeFede. “But we’ve already changed those procedures and it’s not going to happen under this administration.”
That's great Mr. Mayor! And that means the Miami Heat is finally going to start paying its fair share?
Right after they build that park they promised us. Right?
You can read Miami Dade Inspector General Christopher Mazzella's audit of the AmericanAirlines Arena operating agreement with the Miami Heat below.