Report: LeBron James’ return to Cleveland could be a $500 million boon for city
Obviously, the return of LeBron James to the Cavaliers has drummed up a surge civic pride in the city of Cleveland and almost instantaneously turned the NBA team into a possible contender in the Eastern Conference.
But not only is King James’ return a positive development for the NBA team and its fans in the region, according to a financial analysis by the Cuyahoga County Fiscal Office, James “coming home” to Ohio will have a significant and far-reaching financial impact upon Cleveland, as it reportedly could prove to be a $500 million economic boon for the city that calls the Cavaliers home, according to calculations reported by County Executive Ed FitzGerald.
Based on calculations by the Cuyahoga County Fiscal Office, James’s return will increase the benefit from Cavs games alone to about $268 million. Average attendance increased from about 12,000 before James joined the team to about 20,500 during his final season, the county said. Although attendance has slipped, officials expect sold out games next season with James on the court.
The report further states that the economic reverberations will not only be felt directly by the team through increased attendance and associated revenue-generating streams, the financial windfall will be felt in the hospitality industry as well.
Other spending increases will come at restaurants, convention business and hotels, FitzGerald said. Anticipated benefits include a $34 million increase in annual spending by fans at games to $170 million a year plus 500 additional jobs supported by the Cavaliers, the county said.
James’ return also nearly doubled the value of the Cavaliers franchise. According to a January valuation reported by Forbes, the Cavaliers were worth $515 million. A venture capitalist now estimates that the Cavs are a billion dollar franchise.
James reportedly will sign a 2-year, $42.2 million deal with the Cavs. Even if LeBron doesn’t lead the Cavaliers to the promised land and multiple NBA titles, the return on investment Dan Gilbert will enjoy on his investment is borderline absurd.
Further, given the estimates by the county office of a $500 financial windfall, the city of Cleveland pretty much got something for nothing with LeBron’s return. Assuming some trickle-down will occur, the entire region of Northeast Ohio will reap the benefits. That’s an awfully nice way to pay back his home region for spurning them years ago, right?
[H/T Eye on Basketball]