Yesterday, Miami Heat owner Mickey Arison went on the Dan LeBatard show and had some pretty interesting things to say about the team’s season. (Find the full conversation on iTunes–it’s the one from 6-25 labeled with James Jones and Ozzie Guillen as guests–at about the 35-minute mark.)
LeBatard and Arison discussed the financial status of the Heat organization:
LeBatard: [Earlier], you corrected me on saying that you were running a business. Was that correction because, basically, the Miami Heat haven’t made enough money the last 20 years and this is the first time they’ve turned a profit in the last couple?
Arison: We have lost money every year except the first year LeBron was here and we have lost hundreds of millions of dollars since we built American Airlines Arena. I don’t know if we’ll make money this year or not until all the numbers come in. Obviously, having a playoff run including a seven-game series helps a lot but with the new luxury tax–the new revenue sharing–I think we’ll be lucky to break even but I don’t think we will break even.
LeBatard: Can you explain that to somebody who doesn’t understand, Mickey? Because that doesn’t seem to make a lot of sense. I don’t understand how that can possibly be–where you have the most successful basketball team in the world and you can’t make money.
Arison: It’s the system. It’t the market. Just to give you a sense of numbers–and this is just ballpark, right?–my guess annually 20 million dollars for my TV rights. Teams like the Knicks, or Chicago, or LA will get between 75 and 150. My gate could be a million, a million-1, a million-2. Madison Square Garden is 2.5 million. And guess what? My salaries are the same as those guys. If you’re New York, Chicago, or LA, it’s a business. Anywhere else in the country, it’s a hobby.
I’m always a little bit skeptical when sports owners say that they lost money. He may be losing money on an operating basis but this year’s championship almost certainly caused the value of his franchise to increase exponentially more than the negative net income. When the Dodgers get sold for $2.1 billion–$500 million more than the most liberal estimate of what they are actually worth–it’s hard to take sports owners seriously when they talk about annual profits and losses.
(A cursory Google search doesn’t say what Arison paid for the Heat but I imagine it’s substantially less than the franchise’s $457 million Forbes valuation.)
Arison also said that the Heat “won the right way”:
LeBatard: I’m surprised, Mickey, that defiance hasn’t leaked out of anybody in the organization given what you guys have endured for the last two years in terms of public criticism and hostility and bad feelings. I’m surprised that at no point at anybody has it leaked out a little bit of defiance. You know, like ‘Eat this.’
Arison: I don’t think anybody feels that way. I always felt that a lot of the criticism was just wrong. Especially, a lot of it that was directed toward LeBron. A lot of it that was directed toward the organization. I think the organization did it the right way. We worked hard towards getting the cap space in 2010 and tried to put a good product on the floor in between and even make the playoffs while we were doing it.
On this point, I’m inclined to agree with Arison. While many writers and fans took issue with building the team through free agency, is clearing cap space really less admirable than tanking a season and hoping to win the lottery? As Arison said, the Heat actually made the playoffs in 2010 amidst their long-term pursuit of LeBron James and Chris Bosh. Miami ultimately provided great value for its season ticketholders and operated within the rules of the system that Arison says causes him to lose money.
Perhaps the most impressive example of the Heat “winning the right way” was the manner in which Dwyane Wade deferred to LeBron James during this playoff run. Earlier this week, Dan LeBatard profiled Pat Riley in the Miami Herald:
Riley was completely unsurprised that Wade decided earlier this season to finally defer to James with uncommon self-awareness for a star. The Van Gundys say that the hardest thing to coach is an aging superstar because the mirror so often lies to them, but Riley says he didn’t even have to nudge Wade out of James’ way. That kind of decision had to be made by Wade himself for it to come without resentment.
“What Dwyane did was normal for him,” Riley says. “He didn’t have anything to lose. He’s got skin in the game, and he’s had it for a long time. He is one of the most beloved players in the history of this city. He’s invested. He’s gotten all the pats on the back and awards and money and fame. It is easier to serve your teammate who hasn’t gotten the one thing he wants. When you do that, in the end, you are going to be the winner, too. Whatever he gave up, because the team needed it, it is one of the great things that great team players do. Magic did that all the time, gave up his game for someone else. What Dwyane did came very naturally to him. It wasn’t a pain to him. He’s smart enough to know what was needed.”
Riley can claim to have known all along that Wade would exhibit the humility and leadership necessary for the Heat to optimize their championship odds but he is saying so with the benefit of hindsight and ultimate success.
Wade, who was the best player on Miami’s 2006 championship team, is still one of the 10 best players in the NBA and thus one of the 10 best basketball players in the world. To get to that level in any profession you must possess supreme natural talent and be ruthlessly competitive. Can you imagine the 10th-most profitable hedge fund manager humbly deferring final say on financial transactions or the 10th-best heart surgeon agreeing to provide back-up support to another doctor on an operation?
For Wade to publicly say that this was LeBron’s team and behave in accord with his words was a fascinating plot narratives in these playoffs. Can anybody think of a parallel inside or outside of sports?