Hannah Breese
Mrs Straub
Economics B1
5 May 2015
LeBron James Bringing More Than Basketball?
LeBron James: the four time MVP, out of Akron, Ohio an impact on the economy? After spending a solid four seasons with the Miami Heat winning back-to-back championships, James decides to “pack his bags” and return home to the Cleveland Cavaliers. This was a disputed decision, some fans argued that it was good because he would be a great asset to the Cleveland team and city but many also said he was leaving a lot of opportunity behind in Miami coming off of the two big championships. Even though it seemed like a rather stupid decision to some, on the positive side the return of LeBron James has boosted the Cleveland economy bringing in an approximated $500 million extra a year(Unemployment). Without the return of LeBron James, Cleveland would still be declining financially, and lacking any economic growth.
It is stated that LeBron James is bringing around $500 million dollars to Cleveland(This). Through analysis of ticket prices, game attendance, revenue for the city, playoff games, and merchandise sales it all adds up. After one of the worst seasons in the NBA in 2013-2014 season, the Cavaliers at the start of the 2014-2015 season were leaders in both merchandise sales, and ticket prices. For example, in 2013 the Cavaliers sold regular season game tickets for around $55.95 which earned the team a total of $47 million in ticket sales. Once LeBron announced his return, season tickets sold out immediately and the rest of the tickets had to be raffled off-with hopes of giving everyone an equal chance(Appelbaum). Remembering that back in January of 2010, Cleveland was battling through a recession with an unemployment rate of around 10%. Now, just a few years later, the unemployment rate has dropped to around 5.6% as of March of 2015(Unemployment). This video gives more of an in depth look at the effects of the return of LeBron James on the economic conditions of Cleveland.
Additionally, we must consider just how much LeBron James is making a year and how that amount of money can stimulate a city, and basketball organization. According to Forbes, he will bank close to $42 million dollars just from endorsements alone. Mostly from Nike, but other big name brands too. Obviously, a player with such a big name and reputation is going to draw a crowd when it comes to events, like basketball. People could argue that with the increased ticket prices, hotel prices, and everything else it will draw money out of the city but that is just not the case. The money will flow through the economy and end up benefiting the state and city anyways. Don’t forget that if more people are at the games, or in town at the hotels and restaurants, more jobs will be created. According to Bleacher Report, 550 jobs have been created just because of the return of LeBron. It seems like a small amount but for a city that is recovering from a high unemployment rate, that’s a good start.
To conclude, yes the opportunity cost of leaving Miami was going to a team who hadn’t won the championships but the economic benefit for the city was well worth it. Disregarding whether or not LeBron James is a personal favorite, there is no denying that he has made an impact on the Cavalier basketball program, and the Cleveland economy alike.
Works Cited
Appelbaum, Binyamin. "Will the LeBron James Stimulus Be Good for Cleveland?" The New York Times. The New York Times, 8 Nov. 2014. Web. 5 May 2015.
"Examining Economic Impact in LeBron's Return." Bleacher Report. Web. 5 May 2015.
"Kobe, LeBron Lead NBA's Highest Paid Players 2014." Forbes. Forbes Magazine. Web. 5 May 2015.
"This Is How Much LeBron James Could Boost Cleveland's Economy." Time. Time. Web. 5 May 2015.
"Unemployment Rates for Metropolitan Areas." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics. Web. 5 May 2015.
There is no doubt that LeBron James has made a significant step in the incline of the Cleveland economy. He can be credited almost single handedly for the increase in ticket sales. With more ticket sales comes more sell out games. If a game becomes sold out, the demand for tickets rises substantially because there is no longer a way to buy tickets at the regular game price. The only way the buyer is to get a ticket is by buying one from someone who already owns a ticket. Knowing that the buyer has limited options for their scarce resource, the seller can dramatically increase the price witch can make even more money for the team.
ReplyDeleteWow, this really surprised me with how much LeBron James effected the economy of each city he is playing in! It's crazy how this one person can have such a huge impact of the economic status of that city. I liked how you mentioned the difference of the unemployment rate before and after Lebron played for Cleveland.That is a huge jump of the employment rate. With Lebron playing for Cleveland, the demand for tickets will for sure increase. But maybe the price will also increase because the demand for LeBron tickets could be inelastic. This great basketball player is not only bringing greatness to basketball but the economy as well.
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ReplyDeleteHannah, I thought that you had an interesting blog idea. The fact that one person could make that much of an economic impact on one city is quite astounding. Also the decision may not seem very ideal when he had been so successful in Miami. I thought that your video was a really good touch to incorporate some more information to what you had already said, and I also liked your thesis statement it was very good. The only thing that I think you could incorporate more of to make your blog post a little better is some more economic content. Otherwise, it is really nicely done. Good job!
It's interesting that James has such a huge impact on Cleveland's economy. I never would have thought that one person could create jobs and boost the economy just by signing with a certain team. While Cleveland's economy is improving, it would be interesting to see how Miami has been impacted by his leave. I know they are a better team, but there were probably a lot of LeBron fans that went to the games just for him. Merchandise revenue is probably decreasing, since LeBron's jersey is no longer sold there, as well as a slight decrease in the number of tickets sold and the value of them.
ReplyDeleteI never really thought that one person could have such a big impact on not just himself but also the amount of money that others are making. Now looking at it, it really makes sense that he has such a big impact on the economy and is creating over 500 jobs for people. I dont however wonder what some of these jobs are. Aside from that, This is a great example of using fame in a positive way. Great blog post, very interesting and thought provoking.
ReplyDeleteIt really is amazing how one man can stimulate the economy so much. Since LeBron James came back to Cleveland, tickets have seemed to become inelastic. Despite any price changes, fans are still willing to buy the tickets, continuing the high quantity demanded. LeBron is definitely a successful form of human capital, using his athletic skills and celebrity endorsement opportunities to create great revenue and stimulate the economy. Overall, I think Cleveland is in good hands as LeBron James will continue to have a mega impact on its economy.
ReplyDeleteGreat job using LeBron James to show how one person can significantly impact a city economically. I liked how you incorporated many cause and effect relationships that we've learn about in Econ and you made it interesting by taking about someone almost everyone is familiar with. I think the economic situation in Cleveland is similar to Green Bay. Because of the Packers, Green Bay brings in thousands more dollars that keeps it's economy running.
ReplyDeleteI think it was really interesting using LeBron James and how he went back to his hometown. In relation its a huge thing ! that is like Brett Farve if he wasn't retired coming back from the Vikings to the Packers.. It made people excited having him back and that will shoot up revenue and keep Cleveland rolling.
ReplyDeleteThis was a really interesting topic that you chose to write about! I didn't realize how much of an impact LeBron James had on the economy. It does make sense, though; people will be willing to spend more money to see such a high profile athlete, and that money would flow back into the economy. The increased prices for tickets to the games, staying in hotels, and doing other fun activities in the city of Cleveland will end with more money spent by consumers, which will aid their economy. Great article!
ReplyDeleteI think this is a very interesting article. It's amazing how one person can make such a change in the local economy. I liked how you were able to relate econ to something that is such a huge deal in the sports world today. I agree with Madeline's Green Bay statement, the more popular the local professional sports team is, the more money the local economy brings in.
ReplyDeleteThe effect that LeBron has had on Cleveland doesn't surprise me. Wherever he goes big things seem to happen. He has become one of the most recognizable athletes in the US. LeBron's popularity seems to just be increasing with him being a part of an oligopoly of elite athletes that have their own line of clothes and shoes for example. He is from Ohio so the opportunity cost for LeBron staying Miami while making more money and being a part of a championship team couldn't compare to going home to Cleveland. As long as LeBron stays healthy I don't see him leaving Cleveland anytime soon thus Cleveland's economy will continue to strengthen.
ReplyDeleteIt's amazing that one man can have such a huge impact on an entire city. Sports figures around the country cause cities, and states to grow. Everyone wants to see the best player in the game play so of course they will have packed seats, and nearly everyone in the stadium most likely walking into the apparel store asking for the newest LeBron clothes. Now in the future with the championship around the corner, it seems clear to me that Cleveland is going to be a very successful city.
ReplyDeleteThis is so nice that man can have a such impact to this society and also amazing how one person can make such change in the local economy. I like that how people like related to sports and economy because a basket ball player can change the city. According to Bleacher report 550 jobs have been created just because of the return of LeBron. it seems like a small amount but for a city that is recovering from a high unemployment rate. I unbelievable a single man can change society and people. He makes so much money that's second thing but he helps of people.
ReplyDeleteWith the power of Lebron James, he can create so many jobs by doing just one thing. With his shoe company he needs agents to help him create designs. It might not help an insane amount with the unemployment rate, but it can at least a little bit.
ReplyDeleteThis is a very interesting post! I think it is really cool how much money Lebron James is bringing to Cleveland. Lebron's return to Cleveland has really helped the economy of Ohio by creating more jobs and is helping to get them out of a recession. I also wonder if the economy in Miami will get worse from Lebron leaving the Miami Heat. Overall this was a really interesting post!
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