Miami-Dade County has budgeted an extra $2 million in payments to the Heat for the team’s arena construction debt in 2020, to make up for the fact that the arena is currently without a naming-rights sponsor after American Airlines opted out of its deal last year. If you’re wondering why this is the county’s problem, I direct you to my post from back in October 2018 where I recapped the situation thusly:
Back in 1996, when the arena measure was going to the polls for a public vote, there was a lot of opposition to the notion of putting tax money into a private sports arena. So the Heat owners pulled a last-minute switcheroo: Instead of Miami-Dade paying for the team’s arena, the team would pay for it — but the county would pay the team $8.5 million a year to play in it, amounting to the exact same amount of subsidy at the end of the day. But the team would at least pass along its $2 million a year in naming-rights fees to the county as part of the deal.
Flash forward to today, when $2 million a year is a relative pittance in naming-rights fees. Miami-Dade County leaders clearly realized this, and figured, “Hell, if there’s more money to be had from naming rights, we should be getting it to defray our annual subsidies to the team.” And thanks to that lease clause, they could do it.
Yeah, well, it sounded like a good idea at the time. Unfortunately, the county’s naming-rights-sales consultant, the maybe-ironically named Superlative Group, failed to cut a deal in 2019, and 2020 has been godawful for the airlines and other industries that typically like to throw big money at sports naming-rights deals, so now Miami-Dade is looking at having to cover this year’s $2 million payment out of its general funds, and quite likely next year’s as well.
There’s still a chance that the county could make it all back if it signs a big-money naming-rights deal once the pandemic is over, but if everything has changed as we’re constantly being told, it’s not a certainty. I don’t especially blame county officials for rolling the dice on a naming-rights windfall to try to recoup some its arena subsidies — hell, I praised them for it less than two years ago — but digging that $6.5-million-a-year hole in the first place just looks worse and worse.