Photo: Mike Ehrmann/Getty Images
One would think owning an NBA championship franchise made up of LeBron James, Dwyane Wade and Chris Bosh would be a huge boon business-wise, but that’s not the case.The Miami Heat’s billionaire owner Micky Arison told CNBC’s Darren Rovell the team probably lost money this past season, (via I am a GM).
“Every year in the building we’ve lost money aside from last year, under the old Collective Bargaining Agreement, because of LeBron.”
Despite selling out every home game since putting together the “Big 3,” the Heat have lost money because they’ve gone over the salary cap.
Last season Miami paid its players $65 million in salaries, which was $7 million over the cap, so at a $1 to $1 luxury tax rate it cost the team another $7 million. The Heat are also in the upper-third of NBA teams in terms of revenue, so they have to put money into the NBA’s new revenue sharing pool.
Additionally, Arison says their TV deal pales in comparison with that of other top NBA teams like the Los Angeles Lakers and New York Knicks. The Heat’s deal is around $20 million a year, while the Lakers and Knicks bring in between three and six times as much annually.
It’s worth noting that Arison’s comment about it being “because of LeBron” isn’t meant as a complaint, he’s simply pointing out the realities: building an NBA super team costs a lot more money than most people think.
These penalties for having high player payrolls are why Arison was one of the few owners who voted against the new CBA.
But this was by far the most telling part about Arison’s exchange with Rovell:
“This is a hobby of passion, it’s not a business.”
Translation: if an NBA team is your main source of revenue you are completely screwed.
It’s no wonder teams like the small market, Michael Jordan-owned Charlotte Bobcats were so adamant about signing the new CBA to fix their serious financial issues.
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