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Heat owner says team losing money
Buoyed by the acquisition of Shaquille O'Neal and Dwyane Wade's emergence into an NBA star, the Miami Heat are on pace to shatter franchise attendance records, and are seeing huge increases in concession and merchandise sales.
And still, it may not be enough to turn a profit.
Heat owner Micky Arison said Tuesday the team may raise ticket prices next season, bridging what he says is a gap between attendance and revenue. He stressed that no decision has been finalized, nor did he reveal how much the average ticket price may jump for the 2005-06 season.
"Our revenue position is still way short of what it needs to be competitive in the league," Arison said. "I think right now we're in the top five as far as overall attendance in the league, but we're in the middle — if not lower than the middle — in revenue."
Miami's average ticket price this season is $46.25, according to a study conducted by the Team Marketing Report at the start of the season. That's consistent with the leaguewide average of $45.28.
But the Heat's price was unchanged from last season, and Arison said team officials "basically have not raised ticket prices in the building since we opened it." Ticket prices for this season were set when the trade for O'Neal became final on July 14, and the Heat had just extended its television deal with Sunshine Network.
Simply put, the Heat couldn't cash in on the Shaq craze this season, outside of selling more tickets.
"Everything we did prior to July whatever-date-that-was was undersold," Arison said. "Every marketing deal, every sponsorship deal."
While the value of the franchise is now approaching an estimated $250 million — about four times what Arison paid in 1995 — it's still operating in the red.
Miami received a luxury tax payment last season, one that Arison — the billionaire chairman and CEO of Carnival Corp. & plc, the world's largest cruise group — doesn't project seeing for 2004-05. The team has lost as much as $30 million annually in recent years, and Arison said the team's present forecasts suggest a bigger loss for this season than what it endured a year ago.
"We want the building full. We love having the building full," Arison said. "And we love having a team that potentially can contend. So we're going to work to try to get all of those things done. It's going to be a little bit tricky and that's why we're taking our time and studying this thing." |
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