For The First Time Ever, The Miami Heat Paid Rent

The financing on American Airlines Arena, which opened on Dec. 31, 1999, is unique. The Heat paid the full construction costs of the $213-million building, which is owned Miami-Dade County. That's good! In exchange, Miami-Dade gave them the $38-million plot of land, and promised $6.5 million in annual subsidies. That's bad. The county, never great with arena math, also negotiated a share of the profits. This year, for the first time ever, there were enough profits for the Heat to cut a check.

The specifics of the revenue sharing are quite favorable for the Heat. In addition to the annual subsidy, the Heat have gotten first crack at the profits to pay off the construction financing. Until LeBron James arrived, there was never enough money left over for the landlord county. Even in these recent good years, the Heat were allowed to deduct past losses.

But 2013 was a big year, and Miami-Dade finally saw a cent on the building it owns. Here's how it breaks down.

The arena turned a $30 million cash profit this year. (That includes only concessions, suites, and club seats, not any of the much higher profits from merchandising, TV revenue, and general admission seats.

Of that, the Heat took $14 million toward paying off construction costs.

The Heat also took an additional $1.3 million to cover the cost of facility upgrades.

The Heat then pocketed another $14 million, as per the terms of the lease.

The agreement stipulates that the team gets 60 percent of what remains.

That leaves the amount the Heat delivered to Miami-Dade County today, a grand total of $257,134.12.

Oh, and the Heat are looking for an increase in the annual subsidy the team receives from the county. They want it more than doubled, to $17 million a year.

Maybe this is what politicians are referring to when they talk about the economic impact of stadiums and arenas?

[ Miami Herald]