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The Heat Group Business Information, Profile, and History

601 Biscayne Boulevard
Miami, Florida 33132-1801
U.S.A.

History of The Heat Group

Originally formed to bring a National Basketball Association franchise to Miami, Florida, The Heat Group has evolved into a multifaceted sports and entertainment company and is owned by Carnival cruise ship mogul Micky Arison. The cornerstone of the Heat Group remains its NBA team, the Miami Heat, but after building 20,000-seat American Airlines Arena for the franchise, the parent corporation has focused on taking full advantage of its state-of-the-art facility by booking the arena as much as possible. In addition to the Miami Heat, The Heat Group owns the Miami Sol, a Women's National Basketball Association (WNBA) team, which plays during the NBA's off season. The company also has a stake in a New York business that produces stage shows and is involved in real estate ventures.

Florida Cities Vie for NBA Franchise in the Mid-1980s

At the start of the 1980s, the National Basketball Association was a troubled enterprise. A majority of its clubs were losing money, and a few were in actual danger of folding. With the emergence of star players Larry Bird and Magic Johnson, interest in the game began to pick up, and the institution of a salary cap in 1983 greatly improved the financial picture for owners. However, it was the 1984 hiring of David Stern as NBA commissioner that was the key to launching the league on an extended period of strong growth. He marketed the NBA's stars to great effect, boosting the gate as well as broadcast revenues. He was also fortunate, of course, that in the same year he was hired, just as the careers of Bird and Johnson were peaking, the most marketable athlete in the world was taking the stage: Michael Jordan. Instead of shrinking the league, the NBA in the mid-1980s began to consider expansion, and a number of cities lobbied the league for a franchise. In Florida, three cities had groups vying for teams: St. Petersburg, Orlando, and Miami.

The Miami Sports and Exhibition Authority, formed to bring professional sports to Miami, originally supported the NBA application of car dealer Alan Potakmin and real-estate investor Seth Werner, but eventually decided to back the efforts of a new group that featured long-time friends, former NBA star and coach Billy Cunningham and ex-NBA player agent Lewis Schaffel. They recruited two other partners, theatrical producer Zev Bufman and Carnival Cruise Lines founder Ted Arison, who had turned over control of Carnival to his son Mickey and was looking to diversify his holdings. Cunningham and Bufman then assumed the lead roles in the group's efforts to land an NBA team in Miami, which they originally intended to call the Florida Heat. Not only did the investors have to pay a $100,000 non-returnable deposit to the NBA, it was imperative that the city of Miami demonstrate that it had a new arena under construction. As a result, the Heat Group announced that unless construction on a proposed 16,000-seat facility had begun by August 1986, which would allow a new team to begin play for the 1987-88 season, it would withdraw its bid. When construction was delayed by several months, the group continued on, believing that Miami would still be successful in winning an NBA team. It was widely believed that the league would expand to just one of the three contending Florida cities, and those in Miami who were concerned with this matter had little doubt that their community would be the clear-cut winner.

The NBA expansion committee announced their recommendations to club owners on April 2, 1987, calling for new teams in Charlotte and Minnesota. While applications from Anaheim, St. Petersburg, and Toronto were turned down, the committee also decided that a third franchise should be awarded but had been unable to choose between the Florida Heat group and the Orlando Magic group, opting to table the decision until the league's annual meeting to be held in six months time. According to press accounts, the selection committee was concerned about the Heat's new arena, located in an area of Miami known as a hangout for drug dealers and prostitutes. By failing to choose between Orlando or Miami, however, the expansion committee unwittingly reignited a longstanding feud between the two cities. With the opening of Disney World in 1971, Orlando began to compete with Miami for tourist dollars, and now Orlando's college football Citrus Bowl game was scheduled to be played New Year's Day, in direct competition with Miami's more established Orange Bowl. Local media personalities began making stinging comments about each other's city, and the situation threatened to become a public relations nightmare for the NBA. Clearly the league could not wait until its October meeting to settle the matter, and by failing to choose between the Florida cities the NBA had merely insured that the community that lost was going to be extremely angry and bitter. Only days after the expansion committee made its recommendations, the media-savvy league defused the situation by awarding franchises to both Orlando and Miami. The two cities could now take their rivalry to the basketball court, much to the financial benefit of both franchises and the NBA.

Even as the Heat Group geared up for NBA play, its entry into the league remained contingent upon selling 10,000 season tickets by a December 1, 1987 deadline. Although some 14,000 fans had placed $95 deposits on season tickets, by early November the team had received only 7,500 completed applications and half-payments on tickets. A last minute purchase of 200 tickets by the Latin Builders Association put the Heat over the 10,000 threshold and put to rest any fears that the NBA would rescind the franchise. In addition to setting up a sales staff to handle season tickets, the Heat Group was also busy assembling a front office to hire coaches and evaluate college players and current NBA players who might become available in the expansion draft. Moreover, there were team colors, a logo, and uniforms to select, as well as radio and cable television contracts to negotiate.

The city of Miami had been interested in building a first-class arena since the 1950s, and finally, in order to accommodate the new NBA team, the dream came true when in July 1988 the $52 million facility opened. It was able to seat 15,500 for NBA games and featured 16 skyboxes. At the time, Miami Arena was the largest facility of its kind in Southeast and considered to be one of the finest in all of the country, but within a few years it became obvious that the Miami Arena was the last of a generation of arenas that would now be superceded by a wave of new buildings offering far better accommodations, including the luxury suites and premium seating sections that became all-important to the financial health of contemporary basketball and hockey franchises. The 16 skyboxes at Miami Arena, once lauded, were now regarded as too few and hardly luxurious, their view from the rafters being one of the worst in the building. Moreover, the building's concessions were substandard and the Heat received none of the parking revenues. As early as 1991, the press reported rumors that the Heat was interested in building its own arena, mostly likely in Broward county. The fact that Bufman and businessman Wayne Huizenga had recently formed a partnership to develop arenas only added to the intrigue. Throughout most of the 1990s, the Heat was the constant subject of speculation, as the team bickered with the Miami Sports and Exhibition Authority over the Miami Arena. Relocating the franchise to Broward or some other community was very much a real possibility.

Pat Riley Hired in 1995

The basketball team, in the meantime, proved more successful off the court than on. Despite winning only 15 games in its first NBA season and just 18 games the next, the Heat played before consistent sellout crowds. The team made the playoffs in 1991-92, despite having a losing record, but were quickly dispatched in three games by Michael Jordon and the Chicago Bulls. The Heat fared better in the playoffs two years later but still lost in the opening round. The following season saw the team regress and miss the playoffs, but it marked the beginning of a number of positive changes in the franchise. In February 1995, the Arison family bought out Cunningham and Schaffel, giving Ted Arison's wife, Marilyn, 88 percent of the club. Son Micky was subsequently named managing general partner. Coach Kevin Loughery was offered a front office job and eased out of the organization. In September 1995, the Heat hired Pat Riley, the well regarded former coach of the Los Angeles Lakers and New York Knicks to serve as coach and team president. Riley quickly restructured the Heat's roster and within two years built a contending team that in 1996-97 surprised most experts by winning the Atlantic Division.

With Micky Arison now at the head, the Heat Group intensified its efforts to secure a new arena while at the same time hinting that it might simply sell the franchise. Both the Heat and the Florida Panthers National Hockey League team signed a letter of intent to negotiate with Broward County, which is just north of Miami, on a proposed arena they would share, but the matter was complicated by the looming sale of the Panthers. When a deadline imposed by owner Wayne Huizenga expired with no further movement, the Heat Group decided in April 1996 to abandon the effort to move to Broward and instead began to negotiate in earnest with Dade County, in which Miami is located. In June, a deal was reached with the county to build a $165 million, 20,000-seat arena as part of a retail and office complex expected to revitalize the downtown area near the Port of Miami. The $165 million was to come from tax exempt revenue bonds issued by Dade and backed by hotel taxes and a sales tax rebate. The plan was contingent, however, on the acceptance of two ballot initiatives put before the voters in the fall elections. One approved the use of a site on Biscayne Bay and the second approved the use of public funds to finance the arena. There was strong political opposition to the proposal, and a political action group, the Stop the New Arena Committee, maintained that the use of tax dollars and public land for the arena violated the county's charter and state law. The Heat went to court to block the group's attempt to place its own initiative on the ballot, but according to polling data the arena-funding question was sure to be defeated. At the eleventh hour, a compromise was reached between Arison and Dade County Mayor Alex Penelas, who had long opposed the public debt aspect of the proposal. Instead, the Heat now agreed to privately place the $165 million in bonds as well as pay the debt service. The privately placed bonds would be insured by MIBA Insurance Corp., backed by arena revenues and using the team as collateral. For its part, the county agreed to pay as much as $6.5 million a year to help operate the facility, offset by a $2 parking surcharge. The county also shared in annual net profits, but in effect the Heat Group would be the owners, moving the company beyond basketball and into the arena business.

New Arena Opens on Eve of 2000

With naming rights sold to American Airlines, the Heat's new arena opened on December 31, 1999, not with a basketball game but with music, the Millennium Concert Spectacular of Gloria Estfan, a Miami favorite. After playing the first 13 games of the 1999-2000 NBA season in Miami Arena, the Heat played its first game in its new home on January 2, 2000. The facility seated 19,600 for basketball and could be set up in five different configurations for other events, with seating that ranged from 5,000 to 20,000 patrons. Some 140, 12-seat luxury suites were also available, featuring private balconies overlooking the water. "Starbox" holders enjoyed courtside lounges with private dining beneath the court. A number of six-seat loge boxes also offered exceptional views of the game from perches overlooking the court. The impact on the balance sheet for the Heat was immediate and dramatic. The year before moving into the new arena, the team lost close to $15 million, albeit due in large part to a shortened season caused by the NBA locking out players during the negotiation of a new collective bargaining agreement. Basketball games in American Airlines Arena produced 40 to 50 percent more revenues as a result of the increase in premium seating options, greater sponsorship opportunities, vastly improved concessions, parking fees, and other ancillary income. Aside from the arena itself, the Heat Group hoped to take advantage of the nearby marina in order to host boat shows, regattas, and other events. It also formed a real estate venture called Calor to help in developing the area surrounding the arena into a thriving retail and entertainment locale.

American Airlines Arena, like similar venues around the country, booked major concerts, the circus, and ice shows, but unlike many it lacked a hockey co-tenant to help keep the building in constant use. The Panthers ultimately found a home in Broward County, moving into their own state-of-the art arena. To help fill the schedule during the summer months, The Heat Group pursued a team in the WNBA, the women's professional basketball league formed by the NBA in 1996, with the individual teams operated by NBA franchises. In 1999, the Heat Group was awarded a WNBA franchise to begin play in the summer of 2000. Rather than involving the fans in coining a name for the new team, the Heat Group and WNBA decided to call the team the Miami Sol, the Spanish word for sun and an allusion to the sun and fun reputation of South Florida.

With Heat and Sol games accounting for 125 days a year and concerts another 50 to 60, the American Airlines Arena still had many available dates in the year. To help fill this gap, the Heat Group in 2002 bought a minority interest in a New York company, Creative Battery, which produced stage shows. Although Creative Battery was focused on launching Broadway shows that could then be taken on the road and possibly translated to film or television, the Heat Group's primary objective was to bring in shows to the arena and lessen its reliance on rentals, thereby cutting down on the high cost of license fees. The move would also likely help American Airlines Arena when a new performing arts center opened close by in 2004. Although the Heat basketball team remained its signature enterprise, the Heat Group was now a company with ever-widening aspirations for the future.

Principal Subsidiaries: Basketball Properties Ltd; Calor.

Principal Competitors: The Miami Arena; Office Depot Center.

Related information about Heat

The transfer of energy from one object to another, due solely to their difference in temperatures; symbol Q, units J (joule). The quantity of heat sometimes ascribed to an object or process is the total amount of energy transferred in this way.

otheruses

In physics, heat, symbolized by Q, is defined as energy in transit.Summation of the definitions give in the following six sources; see: Talk:Heat. Generally, heat is a form of energy transfer associated with the different motions of atoms, molecules and other particles that comprise matter when it is hot and when it is cold. High temperature bodies from which there will often be high heat transfer can be created by chemical reactions (such as burning), nuclear reactions (such as fusion taking place inside the Sun), electromagnetic dissipation (as in electric stoves), or mechanical dissipation (such as friction). Heat can be transferred between objects by radiation, conduction and convection. Temperature, defined as the measure of an object to spontaneously give up energy, is used as a measure of the internal energy or enthalpy, that is the level of elementary motion giving rise to heat transfer. Heat can only be transferred between objects, or areas within an object, with different temperatures (as given by the zeroth law of thermodynamics, and then, in the absence of work, only in the direction of the colder body (as per the second law of thermodynamics).

History

The first to have put forward a semblance of a theory on heat was the Greek philosopher Heraclitus who lived around 500 BC in the city of Ephesus in Ionia, Asia Minor. Heraclitus summarized his philosophy as: "All things are an exchange for fire."

As early as 460 BC Hippocrates, the father of medicine, postulated that:

The hypothesis that heat is a form of motion was proposed initially in the 12th century. Around 1600, the English philosopher and scientist Francis Bacon surmised that:

This echoed the mid-17th century view of English scientist Robert Hooke, who stated:

The ability to be able to use heat transfer to generate work allowed the invention and development of the steam engine by people such as Thomas Newcomen and James Watt. In addition, in 1797 a cannon manufacturer Sir Benjamin Thompson, Count Rumsford, demonstrated through the use of friction it ws possible to convert work to heat. In the 17th century, Johann Becher proposed that heat was associated with an undetectable material called phlogiston that was driven out of a substance when it was burnt. He proposed instead the caloric theory which saw heat as a type of weightless, invisible fluid that moved when out of equilibrium. According to Carnot, this principle applies to any machine set in motion by heat.

Another theory was the kinetic theory of gases, the basis of which was laid out in 1738 by the Swiss physician and mathematician Daniel Bernoulli in his Hydrodynamica. In this work, Bernoulli first proposed that gases consist of great numbers of molecules moving in all directions, that their impact on a surface causes the gas pressure that we feel. The internal energy of a substance is then the sum of the kinetic energy associated with each molecule, and heat transfer occurs from regions with energetic molecules, and so high internal energy, to those with less energetic molecules, and so lower internal energy.

The work of Joule and Mayer demonstrated that heat and work were interchangable, and led to the statement of the principle of the conservation of energy by Hermann von Helmholtz in 1847. Clausius demonstrated in 1850 that caloric theory could be reconciled with kinetic theory provided that the conservation of energy was employed rather than the movement of a substance, and stated the First Law of Thermodynamics. Its SI unit for heat is the Joule, though the British Thermal Unit is still occasionally used in the United States.

Heat is a process quantity, as opposed to being a state quantity, and is to thermal energy as work is to mechanical energy. All objects (matter) have a certain amount of internal energy, a state quantity that is related to the random motion of their atoms or molecules. It is a common misconception to confuse heat with internal energy: heat is related to the change in internal energy and the work performed by the system.

In common usage the term heat denotes the warmth, or hotness, of surrounding objects and is used to mean that an object has a high temperature. The concept that warm objects "contain heat" is not uncommon, but hot is nearly always used as a relative term (an object is hot compared with its surroundings or those of the person using the term) so that high temperature is directly associated with high heat transfer.

The amount of heat that has to be transferred to or from an object when its temperature varies by one degree is called heat capacity. When referred to a quantity unit (such as mass or moles), the heat exchanged per degree is termed specific heat, and depends primarily on the composition and physical state (phase) of an object. Fuels generate predictable amounts of heat when burned; Heat transfer rate, or heat flow per unit time, is denoted by:

dot{Q} = {dQover dt} ,!.

It is measured in Watts. Slightly different notation conventions can be used, which may denote heat flux as, for example, dot{Q}.

Thermodynamics

Heat is related to the internal energy U of the system and work W done by the system by the first law of thermodynamics:

Delta U = Q - W

which means that the energy of the system can change either via work or via heat. shaft work performed by a compressor fan), yields the following:

Delta U + W_{boundary} = Q - W_{other}

This combined quantity Delta U + W_{boundary} is enthalpy, H, one of the thermodynamic potentials. The infinitesimal expression for heat, delta Q , forms an inexact differential for processes involving work. Likewise, for adiabatic processes (no heat transfer), the expression for work forms an exact differential, but for processes involving transfer of heat it forms an inexact differential .

The changes in enthalpy and internal energy can be related to the heat capacity of a gas at constant pressure and volume respectively. When there is no work, the heat , Q, required to change the temperature of a gas from an initial temperature, T₀, to a final temperature, T_f depends on the relationship:

Q = int_{T_0}^{T_f}C_p,dT ,!

for constant pressure, whereas at constant volume:

Q = int_{T_0}^{T_f}C_v,dT ,!

For incompressible substances, such as solids and liquids, there is no distinction among the two expressions as they are nearly incompressible. It can be represented as the product of mass, m , and specific heat capacity, c_s ,! according to:

C_p = mc_s ,!

or is dependent on the number of moles and the molar heat capacity, c_n ,! according to:

C_p = nc_n ,!

The molar and specific heat capacities are dependent upon the internal degrees of freedom of the system and not on any external properties such as volume and number of molecules. For such substances, the behavior of heat capacity with temperature is discontinuous at the Bose-Einstein condensation point.

The quantum behavior of solids is adequately characterized by the Debye model. A second, smaller term is needed to complete the expresssion for low-temperature metals having conduction electrons, an example of Fermi-Dirac statistics.

Changes of phase

The boiling point of water, at sea level and normal atmospheric pressure and temperature will always be at nearly 100 属C no matter how much heat is added. The extra heat changes the phase of the water from liquid into water vapor. The heat added to change the phase of a substance in this way is said to be "hidden," and thus it is called latent heat (from the Latin latere meaning "to lie hidden"). This heat transfer may occur by the mechanisms conduction and radiation. In engineering, the term convective heat transfer is used to describe the combined effects of conduction and fluid flow and is regarded as a third mechanism of heat transfer.

Conduction

Conduction is the most common means of heat transfer in a solid. On a microscopic scale, conduction occurs as hot, rapidly moving or vibrating atoms and molecules interact with neighboring atoms and molecules, transferring some of their energy (heat) to these neighboring atoms. In insulators the heat flux is carried almost entirely by phonon vibrations.

The "electron fluid" of a conductive metallic solid conducts nearly all of the heat flux through the solid. Electrons also conduct electric current through conductive solids, and the thermal and electrical conductivities of most metals have about the same ratio. A good electrical conductor, such as copper, usually also conducts heat well. The Peltier-Seebeck effect exhibits the propensity of electrons to conduct heat through an electrically conductive solid. Thermoelectricity is caused by the relationship between electrons, heat fluxes and electrical currents.

Convection

Convection is usually the dominant form of heat transfer in liquids and gases. In convection, enthalpy transfer occurs by the movement of hot or cold portions of the fluid together with heat transfer by conduction. Buoyant convection is because of the effects of gravity, and hence does not occur in microgravity environments.

Radiation

Radiation is the only form of heat transfer that can occur in the absence of any form of medium and as such is the only means of heat transfer through a vacuum. Since these atoms and molecules are composed of charged particles (protons and electrons), their movements result in the emission of electromagnetic radiation, which carries energy away from the surface. Since the amount of emitted radiation increases with increasing temperature, a net transfer of energy from higher temperatures to lower temperatures results.

The frequencies of the emitted photons are described by the Planck distribution. This principle is used in microwave ovens, laser cutting, and RF hair removal.

Other heat transfer mechanisms

Latent heat: Transfer of heat through a physical change in the medium such as water-to-ice or water-to-steam involves significant energy and is exploited in many ways: steam engine, refrigerator etc. (see latent heat of fusion)
Heat pipe: Using latent heat and capillary action to move heat, it can carry many times as much heat as a similar sized copper rod. Originally invented for use in satellites, they are starting to have applications in personal computers.

Heat dissipation

In cold climates, houses with their heating systems form dissipative systems. This is why modern insulation techniques are required to reduce heat loss.

In such a house, a thermostat is a device capable of starting the heating system when the house's interior falls below a set temperature, and of stopping that same system when another (higher) set temperature has been achieved.

References

Chronology

Key Dates:
1987: An investor group is awarded Miami National Basketball Association (NBA) franchise.
1988: Miami Heat begins play in NBA.
1994: Micky Arison becomes managing general partner.
1995: Pat Riley is hired to coach the team.
1999: American Airlines Arena opens.
2000: Miami Sol begins playing in the Women's National Basketball Association (WNBA).

Additional topics

Company HistoryPerforming Arts

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