LeBron's back in Cleveland, and ticket prices are soaring.
(USATSI)
CNBC looked at the basketball-business impact of LeBron
James' move from Miami back to the Cleveland Cavaliers, and it's about what you
would expect. The Cavs sold out of season tickets within 24 hours of the
decision, interest has skyrocketed, and while the Cavs say they have kept
ticket prices relatively stable to not price-out the fans (and good on them for
that), the secondary market has gone bonkers. The Cavs' average price now
reflects high-end tickets, but even that isn't as crazy of an increase as we've
seen with other star transfers.
Despite the surge in demand, Komoroski said the Cavs did not
raise season-ticket prices, and the average price for individual game tickets
remains the same as the top-tier games from last season.
"We have been very conscious to treat our fans with the
same degree of respect and integrity as when we were in our rebuilding
mode," he said.
In the secondary ticket market, however, prices are rising
across the board. At Stubhub, Cleveland Cavalier transactions are up 4,150
percent year over year, with an average ticket price of $184—almost $100 more
than last season. Meanwhile, King James' former team, the Miami Heat, is seeing
the opposite effect: Ticket prices there have fallen about $15 from last year.
On TiqIQ, the current average price for a Cavs game is $421,
the highest price in the NBA and more than a 250 percent increase since the
beginning of last year.
via LeBron James return to Cleveland makes Cavaliers ticket
sales leap.
4,150 percent increase in transactions, goodness gracious. A
250 percent increase in price. You're seeing media react to the same. ESPN has
transferred reporters from L.A. to Cleveland to cover James, abandoning the
Lakers. What a strange world we've come to know.
An economics professor made waves last summer by projecting
a $500 million economic benefit of James' return to Cleveland, but a Think
Progress refutal from a Holy Cross professor claims that number to just be
nuts.
“It's just completely unclear how you get $500 million out
of this,” Matheson said. “The Cavs' entire revenue for the year is like $145
million. The Miami Heat, their revenue last year was $188 million. How you go
from that to $500 million for the local economy is crazy. Just on that front
alone it would be crazy.”
...
“So the main issue is what were these people doing when
James wasn't there? They didn't just hole up in their apartments, lights out,
not eating, not drinking, not breathing,” Matheson said. “They were doing
something with that money, and the extra money they're spending on the Cavs has
to come from somewhere.”
Even accounting for the impact James himself may provide —
through charity donations or money he spends in the city, for instance — the
net benefit will probably be small. James already keeps a house in Northeast
Ohio and already donates millions of his dollars to Northeast Ohio charities.
There might be tax benefits for Cleveland and Ohio, but even those are closer
to zero than they are to $500 million.
That's not to say James' return won't have benefits for
Cleveland. He will provide a small economic boost totaling somewhere in the low
millions of dollars, though even the $50 million posited by Cuyahoga County
Executive Ed FitzGerald may be too high, Matheson said. But the same ideas
underlying the claim that James will have a half-a-billion dollar impact on
Cleveland are those that backstop public financing of sports stadiums and
arenas. And those ideas are disputed by loads of research showing that such
plans, or the events that take place in them, aren't the economic windfalls
proponents say they are. Which means that for as exceptional as James is on the
court, he's much closer to ordinary in the sports world when it comes to
impact: the economic side is small but vastly overstated by politicians,
boosters, and the media, while his actual impact — what Matheson calls the
“feel good effect” — is largely ignored.
“It's a great time to be a Clevelander,” he said. “The feel
good effect is absolutely real and it's huge for that. LeBron is making us
happy. But there's no reason to think LeBron is going to make us rich.”
via No, LeBron James Won't Bring $500 Million A Year To
Cleveland's Economy | ThinkProgress.
A Cleveland local county official said in July that the
number is closer to a conservative estimate of $50 million.
LeBron James's return to Cleveland could help bring almost
$50 million a year in new economic activity to the city and region, Cuyahoga
County Executive Ed FitzGerald said Monday.
FitzGerald said his fiscal office worked with Positively
Cleveland, the local convention and tourism bureau, to reach that figure.
The primary basis of his argument is the expected spike in
attendance at Quicken Loan Arena associated with James's return to the Cavs.
"I think there is a measurable economic value,"
FitzGerald said at an afternoon news conference. "When people say this is
just about an athlete making money, there's more to it than that. Other people
will make a living."
via Ed FitzGerald: LeBron's return worth millions to
Cleveland, Cuyahoga County | cleveland.com.
Either way, there's no denying that basketball is suddenly a
hot business commodity in Cleveland again.
