The Lebron Effect
Written by: Drew Retherford For the city of Cleveland the Lebron Effect has been on display, ever since he left Cleveland for Miami, and then returned home in the summer of 2014. However this type of Lebron Effect is rooted in the economics of Cleveland. Cleveland’s local economy has experienced the positive externalities of the Cavaliers organization resigning Lebron James a few years ago. These positive externalities are felt by establishments like the bars and hotels in and around Cleveland. Lebron’s return increased revenue for 3rd parties like bars and hotels as his presence on the Cavs instantly increased interest in the team, leading to a packed house on game night for bars and more rooms being booked at hotels for visiting fans who are going to games. Bars in close proximity to the stadium, reportedly experienced a 30%-200% increase in revenue after his return. Other establishments such as sports shops selling Lebron merchandise also experienced significant jumps in revenue during his return.
Also, it was originally estimated that Lebron’s return would result in a $500 million boost to the Cleveland economy, while that number was off by quite a margin, the Lebron Effect still brought a 9 figure revenue increase to Cleveland’s economy. Finally let us not forget the Cavalier’s organization, as after The King’s return the average number of occupied seats at game time jumped upwards of 3,000. Proving that a single person can have a tremendous effect on an economy.
With the demand the fans have for Cavalier basketball at an all-time high due to the change in demand which was set in motion by Lebron, it is wise that the organization retain the main attraction, Lebron James. It would mean that the Lebron Effect would continue to positively impact Cleveland and further endear him to the fans, thus the Lebron benefits everyone; Cavaliers, Cleveland, Fans, and Lebron.
Works Cited
“LeBron James means a lot to Cleveland — and its economy” Vox.com, 11 July. 2017,https://www.vox.com/2017/6/1/15724252/lebron-james-economic-impact-cleveland-miami.
“LeConomics: Is the economic impact of LeBron James' return to Cleveland more than a feeling?.”www.cleveland.com, 17 Feb 2015. http://www.cleveland.com/cavs/index.ssf/2015/02/lebron_james_cleveland_economi.html.
It's crazy how one player can affect a huge organization like an NBA team. Although with the following that Lebron has you can see how this can happen. Lebron helps his team win games, he creates highlights, and most importantly he brings fans to the arena. When fans come to the arena it can increase ticket sales, merchandise sales, and much much more. It is almost like a trickle down effect. Lebron comes and the demand and popularity increases which also allows you to increase the price of your output.
ReplyDeleteWhile it may seem crazy that one player can make that big of a difference, I don't really find it too surprising. One player can really make a huge difference in winning games, just look at what happened with the packers when Aaron Rodgers got injured. LeBron instantly turns what ever team he goes to into a championship contender, which is what the fans want. Winning games has much more of an impact on a teams financial situation then one may think. If your team never wins games then no one will ever attend and then your left with tons of empty seats and tons of economic loss.
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ReplyDeleteCleveland was clearly affected by Lebron's arrival however,when Lebron left for Miami the attendance per game dropped and did not resurface back to normal until Lebron came back to Cleveland in 2013. It was predicted that the attendance would increase continuously after his return but it is hard for me to believe that it would be a constant increase. After Lebron's return, Yes Cleveland did win a championship. However, the Golden State Warriors took over the NBA with a superteam of their own. So I can't help but think that the attendance at Cleveland games would start to regress after they are beat every year by Gstate, which would affect ticket sales, food sales, etc. causing Cleveland's economic growth to eventually plateau.
ReplyDeleteOne player can make a huge difference in a team and what goes on around them. Since Lebron is a very well known and an extremely good player, he brings with him a lot of excitement to the games. This excitement increases the revenue of the team because more people are attending games and spending money on restaurants and hotels in the area. When Lebron went to Miami, the excitement went with him which is why there was the drop in attendance at the Cavalier games.
ReplyDeleteI was aware that Lebron James would attract more people into Cleveland just because they wanted to watch him, but the economic boost the city has received is eye-opening. It’s good that Cleveland’s economy is experience some growth then because of Lebron. The only problem with this situation is that if Lebron goes to another team or retires, the economic growth will probably come almost to a halt because of how reliant it seems to be on Lebron.
ReplyDeleteEven before his rookie year, Lebron James was already a top prospect. As for any major sports league like the NFL, NBA, and MLB, they rely on not only the most skilled athletes, the most popular athletes too. Leagues encourage all players to affiliate themselves with the community (especially their home team) so they aren't relying on a few athletes to bring in the "big bucks". Bringing it back to Lebron though, as Alex Clementi stated above, in recent years the Golden State Warriors put together a fantastic team, increasing their revenue exponentially. So as Cleveland starts to lose, their attendance may go down, leading to lower income for the league and third party businesses. Overall, in the sports side of economics, it's like a game of luck and who has the most money. In order to make more money, you have to spend more on better players and hope they'll bring what you need to the table.
ReplyDeleteIt is truly remarkable how one person can have such a positive effect on a community. The fact that LeBron James, all by himself, helped increase revenue for local establishments between 30%-200% is crazy. In addition to that, he is bringing in on average 3,000 more fans to games. Economically that is a huge help to the team. Average ticket prices in the NBA are around $50, so Lebron is bringing in around $150,000 more per home game. In the end it all comes down to Lebron himself though. He is one of the most famous athletes in the world so he has an enormous following, and he is one of the greatest athletes in the world. His skills excite many so the Lebron Effect is going to be effective for a very long time.
ReplyDeleteDrew; after reading your blog it is very interesting to hear about the impact Lebron has had on the economy and community of cleveland, and I 100% agree that the Lebron Effect has a very positive effect on the economy and the people in Cleveland. I also believe that for as long as he stays he will continue to bring more revenue and pride to 1st, 2nd, and 3rd parties. You brought up a very good point with the third parties. People may argue 3rd parties bring in more revenue due to sports which they do but they do not bring in nearly as much as The King does. People travelled from all over to watch him play and he truly does bring a community together. Similar to Eagles fans cleveland fans are very diehard to The King. Having a player like that in your community can really change how a community functions and the quality of life there. As you said he has brought in a lot of money to the city of Cleveland. This money can help out a lot to improve the economy there such as bring in more money to help the poor, needy, disabled and even help small town businesses and improve school systems. Lebron also helps out a lot by donating to the people in need which helps the economy greatly because of the support he can bring to people and a community as a whole.
ReplyDeleteBeing a sports fan, I always of course was aware of the "Lebron Effect" in terms of on court effects. For example he assembled a team full of all stars and now that is what every competitive team has had to do to stay just competitive. However, I never really thought about how much of an effect he has on the economy of the area around him. The fact that one man playing basketball can almost resurrect a local economy just by being there is fascinating. I wonder if a move to another larger market team such as LA or San Francisco that is most likely going to occur at the end of this season will merit much of a difference in the local economy
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