Thursday, September 9, 2010
LeBron James economic impact on Cleveland, Ohio
With Lebron James leaving the Cleveland Cavaliers for the Miami Heat, economics should be worried about the economic impact it will have on the city of Cleveland. According to this report, James merely not being in the arena amounts to $1.2M per game or $48M a season on revenue taken away from small businesses in the downtown area. Including decreases in national broadcasting, playoff revenues, and money from visiting teams at hotels, it could come close to $200M a season. In addition, the value of the Cavaliers organization is expected to decline by over $200M. During his term in Cleveland, inflation rose steadily as the economyt was improving. Now, inflation still exists even though the money has been pulled out of the economy. Not to mention over $3M in taxes he pays to the government and the hundreds of millions he already possesses in endorsements. What is the future of the economy in Cleveland, Ohio? For those of you from there, should you be worried? Half a billion dollars is a lot of money to take away from an already sturuggling economy, not to mention the emotional impact it has for sports fans.
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6 comments:
Before LeBron James came to Cleveland, the city was already facing tough financial times. However, Lebron did help the city realize that their economy can be turned around but only slightly. Yes having him in Cleveland was good for small businesses and the city but with him gone, it is going to be even better. His selfish exit will spur Cleveland and keep the economy steady until they can find their next sports star to rally around.
The fact that one person can amount for this amount of revenue for a city in pretty embarrassing for the American culture. Holding one person so high is a little sad. As far as economics though, like JR said Cleveland was struggling before Lebron came and will continue to struggle just like Detroit and the other heavily industrial cities in America. Maybe the Browns will have a respectable years and Cleveland will work its' way up the "Worst Places to Live in America" list?
"LeBron James isn't the only person leaving Cleveland. The U.S. Census estimated that 2,658 people left the city in 2009, the largest numerical drop among America's major cities.
Forbes also put Cleveland atop its list of most miserable U.S. cities, factoring in its high unemployment (although at 9.1% it's below the national average), high taxes, lousy weather, political corruption and lousy sports teams -- and that was before LeBron decided to leave.
See full article from WalletPop: http://srph.it/cUWyYi"
Yes, a basketball player has an impact on a cities economy, but Cleveland was already one of the 'worst places to live' in the United States. LeBron did bring in a tremendous revenue stream to Cleveland, yet, Cleveland remained a horrible place to live. It will take much more than a star player making money in this city for it to turn around.
It's interesting to see how a country's cultural values have such an influence on its own economy. There's probably no where on earth where the departure of a basketball player could negatively affect the economy of a relatively big city such as Cleveland. $200M a season? that's a huge amount of money, consider it's the effect come from 1 single human. Not only did the economy slump but also the morale of the people in Cleveland. LBJ brought a community together and make the people here happier and more enthusiast. I reckon, however, this is still just a theory until we can see it proven
people might just spend the money,which would have been spent on LBJ, elsewhere though I would doubt it
First off, I don't find it surprising at all that Lebron James' departure is making a substantial impact on the Cleveland economy. Lebron James is a star athlete... People come to games to watch him play... Now that he left, not as much attention will be focused on the Cavaliers because they will not remain as relevant on the NBA landscape.
In response to the comments made about this being an indictment or embarrassment of American culture, that just doesn't make any sense. This happens in Europe all the time. For example, if Cesc Fabregas (sp?) of Arsenal in the English Premier League would have left for the Spanish Premier League, there would have been outrage among Arsenal's fans and a likely reduction in their team's performance. Thus, economic repercussions may have followed due to the team's drop in success.
Professional leagues, especially the major ones like the NFL, MLB, NBA, and NHL, are relevant because people like to watch them. Thus, they bring in revenue, and they impact some places positively or negatively based on their importance and relevance in their respective areas.
I think it is a poor reflection of human nature that we value being entertained (by professional athletes, Hollywood actors, or singers) to an exponentially higher degree than we value the every-day heroes in our society, as evidenced by discrepancies in salaries.
Look how little we seem to value education based on how much taxpayers are willing to spend on it. Education increases employment, increases productivity, increases health, increases technology and innovation, and leads to many other economic and social benefits. And yet we as a society spend our time and money obsessing over pro sports and reality TV while our public schools go neglected. Just think if we chose to award bonuses to teachers successful in competing to improve test scores rather than awarding bonuses 8-foot-tall men successful in competing to improve foul shots.
I'm not anti-sports. I'm an athlete myself. I just think that our infatuation with certain pro sports enables inequalities that may not be in the best interest of society as a whole.
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