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Published: Monday, 7/14/2014

LeBron return to bring $500 million a year to Cleveland

BLOOMBERG NEWS
NBA basketball star LeBron James, shown in Brazil while attending the World Cup, will bring hundreds of millions in revenue to Cleveland. NBA basketball star LeBron James, shown in Brazil while attending the World Cup, will bring hundreds of millions in revenue to Cleveland.
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CLEVELAND — Landing LeBron James will mean hundreds of millions of dollars in economic benefit to Cleveland and northeast Ohio, Cuyahoga County officials said.

The return of the star forward to his hometown Cleveland Cavaliers will mean $500 million a year in additional ticket sales and spending, County Executive Ed FitzGerald said Monday. The 2016 Republican National Convention in the city will bring an additional one-time windfall of $200 million, he said.

“While we already know that LeBron’s decision is a tremendous boost for our civic pride, it is also going to have very real benefits for the middle class families who live here in Cuyahoga County,” FitzGerald, a Democrat running for governor this year, said in a release.

On July 11, James, who played for the National Basketball Association’s Cavaliers for seven seasons before leaving in 2010 for Miami, said he was returning. The Republican National Committee announced three days before that it was choosing Cleveland over Dallas to host its convention, which FitzGerald has said could bring 50,000 visitors to the region.

Based on calculations by the Cuyahoga County Fiscal Office, James’ return will generate $215 million from games alone. 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.

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.

There will even be a boost to debt-service payments because revenue from an admissions tax is used to help support about $9 million a year for the $120 million in bonds that the county issued in 1992 to build what is now Quicken Loans Arena where the team plays, said Nathan Kelly, county deputy chief of staff for economic development.

The county expects a $3.5 million increase in admissions tax to put toward debt service -- making up for a similar sum that the county had to cover from its general fund after James left and attendance fell, Kelly said.

Forbes in January valued the Cavaliers at $515 million, 19th in the league. James makes the Cleveland Cavaliers a billion-dollar franchise, Peter Schwartz, managing director of venture capital at Boston-based Christie & Associates LLC, has said.

James grew up in Akron, about 40 miles south of Cleveland, and said he was drawn to return. He wants to raise his family there and bring the first professional sports championship to Cleveland since the Browns won the National Football League championship a half-century ago.

While some Cavaliers fans may still harbor resentment for how James left the team with a special television program that featured his announcement, money is a powerful palliative, Kelly said.

“If there’s anyone willing to forgive LeBron, it’s our fiscal officer,” Kelly said.



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