Anticipating the market
Pictures of Lamar Odom, Brian Grant and Caron Butler, their arms folded and their looks imposing, used to welcome fans to the Miami Heat's Web site. They've been replaced by Shaquille O'Neal, shown wearing a Heat jersey, representative of the team's new future.
Talk of O'Neal's impending trade from the Los Angeles Lakers helped fuel a surge in ticket sales for the Heat. Whether they are purchased online, over the phone or in person at the team's box office, tickets for Heat games at America Airlines Arena are going fast. Seats throughout the facility's lower level reportedly are already sold out for the coming season.
Indeed, O'Neal's return to Florida eight years after he left the Orlando Magic for Los Angeles is expected to create a financial windfall for both the Heat and the NBA's most dominating player.
While Heat tickets are quickly becoming a coveted commodity in Miami, O'Neal stands to save approximately $1.5 million in taxes by playing half of his regular-season games in income-tax-free Florida instead of California, which at 9.3 percent has among the highest effective tax rates in the nation, according to David Hoffman, an adjunct scholar with the Tax Foundation.
"Shaq will be the biggest star to ever hit South Beach," said Scott Becher, president of the Miami-based sports marketing firm Sports & Sponsorships. "Dan Marino was one of the greatest of all time on the field, but off the field was a different story. Shaq is a superstar who has titles, covets media attention and knows how to work reporters.
The team's season tickets range from $369 to $6,765, according to the its Web site. And although Miami Heat officials would not comment on how the imminent O'Neal arrival was affecting sales until the deal becomes official, the Miami Herald reported on Tuesday that the entire lower level is almost sold out for the season. To be fair, offseason sales were already helped in part by the team's surprising run to the Eastern Conference semifinals this past season.
A sold-out upper level could gross the Heat $9.4 million more than it did last season, according to Hadrian Shaw, sports business analyst for Shaw Sports Business, a consultancy firm. An average crowd of 15,239 last season represented the fourth straight season that attendance has dipped since the team peaked at 17,252 during the 1999-2000 season.
Shaq's presence will also mean a $2 million increase in sponsorship commitments and a $2 million increase in concessions and parking revenue, according to Shaw. Merchandise sales also are expected to skyrocket thanks to the arrival of one of the league's most popular players.
Despite the presence of rookie Dwyane Wade and the run in the playoffs, Heat merchandise sales are down 8 percent year-to-date, according to Neil Schwartz, director of marketing for SportsScanINFO, a sports retail tracking firm based in South Florida. But Schwartz predicts that the presence of Shaq could lead to as much as a 10-fold increase in team sales.
Though the Heat could see their national exposure increased just a year after they failed to make a regular-season appearance on ABC, ESPN or TNT, that won't bring them any more money since the league's national television revenues are also split equally. Shaq's Lakers made more than 20 appearances on those networks this past season.
Heat owner Micky Arison said this week that the Heat are not for sale, after a report in the Chicago Tribune said that Michael Jordan was interested into buying the team. If the team, including Shaquille O'Neal, were put on the open market in the coming weeks, Shaw estimates that Arison could get $325 million. That's about $40 million more than the team was worth a couple of weeks ago.
For fans who want to see the Heat this year, it was the fear of that type of inflation -- on a much smaller scale -- that had some of them logging on before Lamar Odom, Brian Grant and Caron Butler disappear.
Darren Rovell, who covers sports business for ESPN.com, can be reached at email@example.com