The Economics Of LeBron James’ Homecoming

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Photo: Erik Drost/Flickr/Creative Commons 

On July 11, 2014, LeBron James announced his return to the Cleveland Cavaliers in an editorial published in Sports Illustrated. On June 16, 2015, the Cavs fell to the Golden State Warriors in the 2015 NBA Finals. In between, James proved why he’s one of the best players—if not the best player—to have ever lived, but he also made a tidy sum of money for and from those who believed in him. Here’s who profited from The Return.

Cavaliers franchise value
Cleveland Cavaliers owner Daniel Gilbert originally purchased the team in 2005 for $375 million. However, the team’s stock plummeted to $329 million within a year of LeBron announcing his intention to leave for the Miami Heat. The franchise recovered to the point that Forbes estimated its value at $515 million just before James’ return. With James on the roster, Bloomberg gave Gilbert’s team a valuation of $1 billion, making LeBron’s presence alone worth roughly $485 million.

Local business boost
It was initially estimated by TIME that LeBron’s return would bring $500 million to the Ohio economy, $57 million of which would be generated locally by hotels, restaurants and other businesses. After the team hosted 10 home playoffs games, Cleveland officials revealed that they were worth about $3.6 million each to city businesses—that’s a total of $36 million in total local economic impact. That means the city businesses profited roughly $93 million.

Cavaliers fanbase
According to Repucom, an entertainment market research firm, the Cleveland Cavaliers’ fan base has grown 79 per cent since LeBron returned to its roster. That translates into an average of 20,567 fans attending every game—in fact, the Cavs sold out a franchise-high 41 games this past season. Cavs TV viewership was also up 166 per cent after James came home.

Cavaliers ticket prices
According to secondary ticket sale site TiqIQ, what fans were willing to pay for Cavaliers tickets has gone up approximately 346 per cent. In 2013-14, the average Cavs ticket sold for $68. After LeBron came back, fans were paying more than willing to fork over $235 or more for a chance to see The King in action.

LeBron’s endorsement deals increased: $5 million
James added Kia Motors, among others, to his already impressive roster of corporate endorsement deals after returning to Ohio. LeBron’s partnerships were worth $39 million according to Sports Illustrated’s Fortunate 50 list of athletes in 2013. The most recent figures offered by Forbes peg that number closer to $44 million.

LeBron’ shoe sales
After LeBron announced his return, Nike’s business increased for the first time in 2010. According to Cleveland.com, LeBron’s signature basketball shoe sales went up 13 per cent over the following 12-month period to $340 million. That works out to roughly $3,683,333 million more every month.

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