Posts Tagged ‘Team Salary’

Miami Heat Sets New Team Record for Player Payroll

April 18th, 2014 No comments
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If the Miami Heat haven’t exactly lived up to expectations thus far this season, it isn’t because of their spending.

Despite making some unpopular moves last summer – utilizing the amnesty provision to waive Mike Miller, declining to utilize the mid-level exception – the Heat spent more on player payroll this season than in any other season in team history.

The Heat ended the regular season with a team salary of $80.6 million – which, perhaps surprisingly, amounts to $2.8 million less than last season’s record total.

But team salary isn’t an accurate depiction of a team’s actual spending on player payroll and related costs. There are several adjustments that need to be taken into account.

First, team salary doesn’t factor in mid-season trades. For example, if a team trades a player midway through the season, his salary comes off team salary entirely, even though salary payments will have already been made. Joel Anthony and Roger Mason, Jr. were each traded during the season. Prior to their trades, they had received a combined $2.4 million in salary payments from the Heat. Conversely, the Heat received Toney Douglas in trade midway through the season. Though his $1.6 million salary appears on the Heat’s team salary, the Heat itself was only responsible for $856K of that total. Adjusting appropriately for these trades, then, takes the team’s payroll to $82.2 million.  Read more…

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A Look at the Finances Behind the Miami Heat’s Success

June 25th, 2013 4 comments
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Micky Arison was one of five NBA owners who voted against the current Collective Bargaining Agreement back in December of 2011. It was mostly a symbolic move – he knew the agreement would pass either way. But the point he was making was clear: the harshest elements of the new contract, the more penal luxury tax system and the new revenue sharing model, were clearly aimed directly at his Miami Heat.

The lockout having ended, the season was spared and the Heat went on to win its first, and now its second, championship of the Big Three era. Heat fans have thus far been spoiled by Arison’s willingness to spend his way into ensuring the future is bright in Miami. But could the day of reckoning the league had envisioned for the Heat soon be upon us?

Player salaries, when combined with luxury tax obligations, can get quite expensive for a title contender such as the Heat. Revenue sharing obligations only increase that financial burden.

So the question becomes: How profitable is the Heat organization?

First, some background.

Micky Arison is a multi-billionaire.

He is the son of Ted Arison, co-founder of Carnival in 1972. He became Chairman and CEO of Carnival in 1979. He announced his intention to step down as CEO earlier today, retaining his role as Chairman, but he nonetheless owns 111 million shares of the company, currently valued at a whopping $3.9 billion!

He is the majority owner of the Miami Heat, having purchased the team from his father and two other men, Billy Cunningham and Lewis Schaffel, for $68 million in 1995, who themselves paid out $32.5 million in expansion fees in 1988 to bring the team to Miami.  Read more…