Miami Heat Wins Title 8211 For Its Sales
Written by Scott Blake on May 9, 2013
By Scott Blake
The Miami Heat laid a dud Monday night in Game 1 of its playoff round against the Chicago Bulls. However, that hiccup in the team’s quest for a second straight National Basketball Association title shouldn’t hurt a growing part of its business: merchandise sales.
The Heat reigns supreme among Miami’s three major professional sports franchises in merchandise sales, according SportsOneSource, a Charlotte, NC-based firm that tracks sporting goods sales, including licensed team merchandise.
The single-biggest factor in sales of team items is winning, said SportsOneSource analyst Matt Powell.
"It’s very important," Mr. Powell said. "The three things that move the needle [in merchandise sales] for a team are winning a championship… changing your logo and signing marquee players. But the catalyst [for boosting sales] really is winning."
The Heat certainly has had the winning part down pat, with the team’s second NBA title coming last year and finishing this season with the league’s best record, including a 27-game winning streak — the second-longest in league history. Game 2 against the Bulls in the best-of-seven series was scheduled for Wednesday night.
From February through April (a period that included the big winning streak), the Heat ranked second among the NBA’s 30 teams with a US retail market share of 17.4%.That means that Heat licensed merchandise accounted for more than 17% of the combined retail sales nationwide of all NBA teams, which Mr. Powell said totaled $5.4 billion last year.
From February through April, the Bulls were first in the NBA with a 19.8% market share, he said.
The Heat boosted its US market share from 10.6% for February through April last year, which was just before the Heat went on to finish as champions for the first time since signing LeBron James, currently widely recognized as the world’s best basketball player.
Miami’s two other big sports franchises: the National Football League’s Dolphins and Major League Baseball’s Marlins — both of which have struggled to find success on the field in recent years — run a distant second to the Heat in merchandise sales.
The Marlins, now in last place in the National League East, ranked 20th in US retail sales of team-licensed merchandise among the 30 Major League teams with market share of 1.2% from February through April. That was down from a 2.2% market share during the same period last year, Mr. Powell said.
Nationwide, Major League-licensed retail sales totaled $2 billion last year, he said.
And the Dolphins, who last season finished in a distant second-place in the AFC East and didn’t make the playoffs, ranked 22nd among the NFL’s 32 teams with a 1% national retail market share from February through April. That was up slightly from 0.8% during the same time last year, with this year’s slight increase perhaps attributable to some aggressive offseason moves by the Dolphins to sign new players.
Overall, NFL-licensed merchandise sales totaled $2.8 billion nationwide last year, Mr. Powell said.
With the Heat being the kings of Miami sports merchandising, first-year sales at the team’s new store at Miami International Airport are projected to reach more than $1.1 million, airport officials said.
The store, located in Concourse D of the North Terminal, opened in December. During its first few months in business — buoyed by the Heat’s 27-game winning streak from Feb. 3 to March 27, the longest in nearly 40 years in the NBA — airport managers are thinking about hosting more sports retail outlets.
"A few other retail locations at [Miami International Airport] carry professional sports team merchandise along with other products, but this [Heat store] is the first location at [the airport] branded with a sports team that solely carries team merchandise," said Miami International spokesman Greg Chin.
"We are in preliminary discussions with other local sport teams" for similar stores, he added.
He wouldn’t say with which teams the airport administration is in discussions.
The airport’s Heat store is operated by Airball Sports II LLC, a subsidiary of the Heat. It is the team’s fourth retail outlet. The three others are at AmericanAirlines Arena, where the Heat plays; a satellite store at the Dolphin Mall on Northwest 12th Street in Sweetwater, and the team’s online retail site, TheMiamiHEATStore.com.
The Heat’s front office did not respond to calls for information on its merchandise sales and the new airport store. However, Mr. Chin said sales for the first year at the airport store are projected to be about $800 per square foot. With the store being 1,381 square feet, that comes to $1,104,800 in sales.
Airball Sports has an eight-year lease with a two-year extension option for its store at county-owned Miami International. Overall, the store is one of 123 retail outlets at the airport, Mr. Chin said.
The Heat announced the opening of the airport store in October, opening Dec. 15 in time for the holiday shopping season. Coinciding with the announcement, the Heat rechristened its entire retail operation with a new name. And sports apparel giant Adidas is the presenting sponsor of the team’s retail website and the exclusive apparel provider for the Miami International location.
"Given the international appeal of our team, Miami International Airport is the perfect destination for the newest Miami Heat Store," Eric Woolworth, president of The Heat Group’s business operations, said in a statement.
"The Miami Heat are proud to call the AmericanAirlines Arena home," Mr. Woolworth added. "It’s only natural that The Miami Heat Store will reside in American Airlines’ Concourse D. We are confident the store will be a tremendous success."
The team already has been recognized for its merchandising. According to the Heat, the organization is the only three-time winner of the NBA’s Team Retailer of the Year award, winning it in 2003, 2006 and 2011. The award recognizes the NBA’s most successful merchandising operations in the categories of arena, internet and external sales.
And the more successful the team is, the better merchandise sales are. By the end of the Heat’s winning streak in late March, sales of Heat items were up 30% year-to-date compared to 2012, according to SportsOneSource.
Sports merchandising is a multi-billion-dollar a year industry. After seeing declines in sales from 2007 through 2010 due to the economic downturn, retail sales of all licensed sports merchandise increased by 5.3% in the US and Canada in 2011, according to a new report titled "Licensed Sports Merchandise Market: Focus on the US & Canada."
The proliferation of social media such as Facebook and other interactive technologies has led to the growth, the report found. It said a significant rise has been noticed in the women’s apparel market, and licensors and licensees continue to look for new opportunities in developing markets such as the so-called "BRIC" nations — Brazil, Russia, India and China.
Other companies have piggybacked on the Heat’s success. Sports apparel firm Sportique has produced a collection of licensed Heat fashion apparel for sale at AmericanAirlines Arena since 2006.
"Sales at AmericanAirlines Arena continue to grow every season," said Sportique co-owner Jason Franklin. "With the success of the Miami Heat, AmericanAirlines Arena has become a destination for both locals and tourists alike."
The brand now has a designated section in the team shop at the arena.
"Sportique is looking to continue to grow our business at the retail level," Mr. Franklin said. "Sportique-branded apparel is now being offered at retail [outlets]…. This year, Sportique did a special collection for the Sony Open" pro tennis tournament on Key Biscayne.To read the entire issue of Miami Today online, subscribe to e-MIAMI TODAY, an exact digital replica of the printed edition.