LeBron James' return to the Cleveland Cavaliers started on a sour note as they lost their season opener on Thursday. But Cleveland residents can't be too mad. James's decision to leave the Miami Heat is projected to add $50 million a year to the city's economy.
The Cleveland Cavaliers have struggled mightily since James left four years ago, racking up one of the worst records in the league. Those losses meant lower TV ratings and fewer ticket sales. Although the Cavaliers have done reasonably well financially, generating about $145 million a year, they did better with James, generating about $159 million a year in 2010. When he left, interest in basketball around the city plummeted, which led to a $125 million drop in the team's estimated value.
James' return is attracting a huge number of sports fans to Cavaliers home games. During his earlier stint on the team, attendance records were among the highest in franchise history:
The increased fan interest drives up the prices of tickets. They were the second cheapest in the league only eight months ago. Now they're the most expensive.
James' return made Cavaliers tickets pricier than those for any other team; Cavs tickets are 33 percent more expensive than those for the next priciest team, the Los Angeles Lakers.
It's not just ticket sales. When James returned, Cavaliers merchandise started selling better than any other team's; sales have grown 700 percent since James came back, according to CNBC. The top selling item, of course, is James' number 23 jersey.
Small businesses working in Cleveland's downtown area are benefiting too. Different reports estimate that Cleveland could generate $500 million in revenue for restaurants, hotels and tourism due to James coming back. But that number is probably too good to be true. In all likelihood that kind of money is seen from reshuffling wealth around the city. Even so, the boost looks to be significant.
It's important to be cautious about these numbers. For one thing, more spending on basketball doesn't necessarily mean more spending in Cleveland. Locals might just might stop spending money on tickets and merchandise for other sports teams, like the Cleveland Browns and the Cleveland Indians. That would mean businesses around those other stadiums would suffer. But the ticket and merchandise figures aren't just estimates, and suggest that James is having a very real, favorable impact on the team's, and perhaps the city's, economic prospects.