Miami Heat Owner Micky Arison Still Won't Share AA Arena Profits With Taxpayers

By Francisco Alvarado Mon., Jan. 9 2012 at 8:00 AM

Micky Arison doesn't think we're qualified to write this story.

With a slew of national musical acts filling seats, and LeBron James and Chris Bosh propelling the Miami Heat to the NBA Finals, the American Airlines Arena brought in a record-breaking $60 million in revenue in 2011. Yet for the 13th straight year, the Heat won't be sharing any of those profits with Miami-Dade taxpayers -- you know, the ones who footed the bill to build the damn place.

The Miami Marlins' ballpark boondoggle has drawn understandable outrage, but this latest slight to Dade residents shows the deal with Heat owner Micky Arison is just as sick. The Carnival Cruise Lines chairman essentially takes advantage of a loophole so he never has to share a nickel with voters who built his bayfront palace.

Under a 1997 construction agreement, the county gave away $38 million of land so Arison could erect the $213 million venue, plus it OKed a $6.4 million annual subsidy for operating the arena for the next 30 years.

In return, Arison's subsidiary -- Basketball Properties, Ltd. -- would pay the county 40 percent of all profits over $14 million.

Guess what? The arena always falls short of the magic number.

According to Arison, not even last season's playoff run, which helped the Triple A generate $15 million more than it had earned in 2010, boosted team profits above $14 million.

Even beyond the NBA, the arena had a great year. Industry publication Pollstar ranks the American Airlines Arena seventh in the nation and 18th in the world, with 340,000 tickets sold from January through September of last year.

But Arison, via Basketball Properties, claims the arena is an extremely expensive place to run. Last year the Heat reported $47.8 million in operating expenses, resulting in only $13.2 million in profit. Those costs included "depreciation and amortization" that ate up $12 million. In fact, "depreciation and amortization" -- what corporations define as the loss in value of its fixed assets, such as kitchen equipment or computers -- has somehow gobbled up $55 million of the Heat's revenue for the past five years.

We phoned Basketball Properties' chief financial officer, Samuel Schulman, to find out what exactly has lost value at the arena. Schulman did not return our phone call.

So we decided to ask Arison himself -- who for the past 16 years refused to answer any New Times inquiries about him -- via Twitter. Here's his reply:

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Tags:

American Airlines Arena, Miami Heat, Miami-Dade County, Micky Arison

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Mfrey

Frankly, I agree with Arison. If Dade made a bad deal regarding the arena and I doubt they thought so, so be it. If Arison is abiding by the agreement in an open and aboveboard manner, I see no problem. The amount of their 40% is chump change when compared to the ancillary revenue generated in Dade County directly due to the Arison's entrepreneurship. I think Mr. Arison should be in the short list for Dade's Man of the Year.

Idiots and theives

The question should be, "What assets are you depreciating and amortizing and please provide their schedules and please make public the tax returns for Basketball Properties.?"

Then we will see how stupid were the Miami-Dade County attorneys who worked on those one-sided agreements.

Ricardok2000

Give the man a brake!

seep

Just one brake? Usually you need to replace them in pairs.

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Sornom

Disgusting....

oink

After briefly inspecting Mr. Arison's Twitter feed, I completely stopped caring about this article and instead wondered how a person of such status could scrawl such poorly articulated, grammatically hideous gibberish for the entire world to read.

Neil's ghost

Mickey Arisonofabitch is a steaming pile of shit. Wait, that is an insult to steaming piles of shit.

Mfrey

Hey Neil's Ghost,What you know about Micky Arison doesn't amount to a steaming pile of anything. He would be a great role model for anyone running a business. I know him to be fair, honest, and a credit to his community. If any man can be judged by his success, Mr. Arison ranks very high. If you or Mr. Alvarado have evidence of any illegalities associated with Mr. Arison's dealings with Dade County bring it forward and make the charge. Otherwise, don't bother us with your uneducated opinion.

MikeMoskos

For more on how short sighted government policies to bring "growth" and "jobs" are bankrupting cities and why, see the Strong Towns blog and podcast.

Geoff Paugam

You can only blame the individuals who write up these contracts with tenants. They sell their souls to lure said venture into the county and based on recent events have proven to be lopsided deals usually benefiting everyone but the people of Miami.

MBBornandraised

I think this situation is reprehensible. However, your question is ridiculous.

Government Lawyers are Dumb

Depreciation and amortization are non-cash expenses which businesses or individuals may claim as losses against active income. Whoever drew the lease for the county should be blamed, as they were foolish in determining "Net Profits" to be the determinant factor for payments. Any business person knows that the "real" profits figure is: Earnings before Interest, Taxes, Depreciation and Amortization ( "EBITDA" ).

Once again, our government relies on clueless attorneys to blow public money when dealing with sophisticated private sector businesses.