Thursday, May 8, 2014

NBA Playoffs

Collin Hodson

Mr. Reuter

Economics

5 May 2014

NBA Teams Effect on the Economy

            With the NBA playoffs in full force and the incredible first round finally coming to a conclusion after multiple game sevens it is an exciting time to be a basketball fan. These 8 teams remaining have seen fan bases bolster as they continue their incredible runs so far. What effect if any however does the economy see in these cities hosting playoff games. It all depends on three things that include the players on the team, the rarity that the team is where they are at, and what the matchups are.

            A lot of people go to NBA games to see the best players play and if you are lucky enough to be in certain cities you can see the best. A specific city is Miami. Miami holds arguably the best player in the world. His name is Lebron James. He has become so popular and famous on the national scene that it is incredibly rare for someone not to know who he is. How has his magnificent performances and skyrocketing popularity helped the city of Miami? According to www.examiner.com the Miami Heat as a team has pumped 1.4 billion dollars into the city of Miami and provided 21,000 new jobs for the city since the Lebron and the rest of the big 3 were formed. It is hard to argue with the positive externalities that are being seen in the city of Miami right now as the Heat continue their run for their third consecutive NBA title. The impact of a player even not as popular as Lebron can still be substantial. Cities like Oklahoma City with Kevin Durant and even Portland with the rise of Lamarcus Aldridge are continuing to see big positive impacts in their cities economy. The marginal cost of purchasing tickets and being able to see the best players every time these teams play at home will continue to help these economies grow especially around playoff time.
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            Not only are players important but another impactful part of a team helping a cities economy especially during the playoffs is the rarity of a team being there. For example the Portland Trail Blazers have been in the playoffs before but not many times in the past have they been able to be competitive or even make it out of the first round. Thanks to Damian Lillard and company that changed this year as they made it through the first round and are getting prepared to take on the number one seed San Antonio. The fan base of this team has really rallied behind them and even though the cost of playoff tickets are expensive the success of the team has influenced the fans to find the price of tickets more elastic than ever before. According to espn.com the Trail Blazers had a total attendance of 676,384  in 2012 but then in 2014 they had an attendance of 809,612. That is a pretty large increase that has been seen with this team and shows that people are more willing to come out and support their hometown team.
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            Finally another factor on the economy but not really on the city level is TV ratings. The first round of the NBA playoffs have seen incredible viewing numbers thanks to the excitement of multiple overtime games and teams being pushed to the wire when they shouldn’t have been. TNT and NBA TV have seen incredible increases in their viewing since the playoffs have started. According to awfulannouncing.com NBA TV has seen an increase of 237% in their viewers in comparison to last years playoffs. People are watching these games because they have been more competitive than ever before and it is worth the opportunity cost to spend a night watching the NBA playoffs. It has been incredible to see how popular the NBA has been over the past few weeks with the playoffs in full force.

            The NBA has not always been the most profitable business when it comes to the 4 major sports but seeing the impact that this years playoffs has had is very promising for the future. Having a NBA team is an important part to a lot of cities economy and hopefully the popularity of these teams continues to grow.




















Works Cited






15 comments:

  1. It's crazy to see how much money the teams, players, and cities can make as a result from the playoffs. Especially when there are game 7's in a playoff series. I can see where it helps Portland a lot, because of all the publicity that the series has gotten between the Trail Blazers and the Houston Rockets. It was one of the more entertaining playoff series I have ever seen. It made it even better with the ending, when Damian Lillard hit a game winning three pointer as time expired. It elevated his star-level substantially, and the city and team benefit even more from having another playoff series, considering they have not been a playoff team every single year, like the San Antonio Spurs. Good article to read.

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  2. Being the first to post on this article I'm honored. However just possessing a player that possess such skill like Lebron or KD I would suspect there to be such an increase in people who would come to their games and also the rise in jobs that have been created with them as well! Like a 12,000 increase in employment for basketball related purposes is just incredible. As well as the amount of people who come to the games now, in increase of basically 200,000 people in just two years is in incredible thing. Basketball has made such a huge impact on society and economy, its really come a long way.

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  3. How does the economic impact of the NBA playoffs compare to other events such as the Superbowl for the economy? Especially as you’ve noted that there has been an increase of popularity with the rise of players such as Lebron James. Have these cities taken advantage of the newfound popularity by increasing costs due to increased demand?

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  4. It amazes me just how much money sports can bring into the economy. It's no secret that we love our fans and our teams and are willing to go to extreme lengths to watch them play, but I never would have thought that the economy would be racking in this much money solely from basketball. This makes me wonder how much in total our nations economy takes in from all sports combined. And if playoffs can bring in this much money and capture the attention of this many fans, I wonder what the superbowl does for the economy. This was an interesting topic!

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  5. If the dollars stay local, I can see economic benefit. Big attractions for people to spend money on are usually good. In all honesty I am not a huge basketball fan, but if it helps the economy then I guess I'm all for it. I do sort of wonder if this is like that Super Bowl deal where the economic benefit is closer to net zero than positive though.

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  6. Basketball teams, or any sports team for that matter, can have a very positive effect on a cities economy. It is no wonder why the top players earn such a higher salary than the lower level players because of the fact that if a team is successful the city can make so much more money. If a team makes the playoffs because of one player who has a larger salary than others, the city can make the salary up in ticket sales, promotion at the games and increases in hotel and restaurant income. With the major sports only growing in popularity and income the potential income that these cities can obtain will continue to grow as well.

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  7. It's amazing how much one person can affect the economy. Having Lebron on the Heat not only makes their team talented, but make the cities economy flourish. What surprised me in your article is that from last year's playoffs, NBA TV has had a 237% increase in viewers. I would expect that over maybe a decade, but from one year to another, that is a huge leap. I wonder if the sport is becoming more popular of if it has something to do with technology increasing too. People are buying their 60 inch flat screens and inviting their friends over to watch the game. The NBA affects a lot of businesses, not just the sport of basketball itself.

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  8. You never really realize how much sports have an effect on the economy until you step back and look at the big picture. When I watch or go to sports game I'm never thinking to myself how much money they are making from this or how much the team brings to their city but after reading this article it really shows what sports can do. It's amazing how much of a positive impact sports and players make and how many people invest into sports just to watch their favorite team or player play. Being a sports fan myself, I do invest a lot of my time watching sports and even sometimes going to games. It's not cheap going to an NFL game and thinking how many people go including myself I can't even imagine the profit they are bringing in. This is a great article because everyone invest some type of money into their sports team.

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  9. It goes to show how much of an impact a team can have on a city. With talk of a new arena in Milwaukee possibly coming to a stand still, it's things like this that need to be shown to people to help them understand how important a role an NBA can have in a city. For example, an even smaller market than Milwaukee had an extra 800,000 people come to downtown Portland per year because of one team.

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  10. People are usually so negative about basketball and football players being paid too much, but little do they know that it can actually have a positive effect on the economy. All the money the teams bring in to their city is impressive and it really ups the city's rankings. I'm not a regular fan at basketball games or sporting events, but from the games I attended there is a large variety of fans. People travel miles and miles to see their favorite team play, having no care how much gas or tickets cost. The benefit of the game is much more important to them. I didn't realize how much sports teams can actually benefit the economy.

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  11. This was a great article! It was very interesting to see how much impact players have on our economy. While a lot of people say they are way over paid the amount of money they can bring to a city is incredible. Milwaukee is opening a new arena soon which could bring lots of money to Milwaukee so I believe people need to understand the NBA is only economically benefiting the U.S.

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  12. Any kind of playoffs bring a lot of money. Football, Hockey, soccer, and even golf bring just as much money or even more. Playoffs are exciting and fun to watch and everyone in the world watches it. Pro Sports, in my opinion, brings in the most money in the world and without it, the economy will be hurt.

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  13. It’s crazy to think about the effect that sports can have on the economy of any given city, state, or even country. Most people just think of sports as an escape from the everyday pressures of life, but it is so much more than that, sports can do amazing things for businesses and even economies as a whole. And the playoffs are among the most important contributors to that effect. It’s insane that the viewing has increased by 237% this year. With all of that extra publicity and income, any team lucky enough to participate in the playoffs are doing great things for their cities’ economies.

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