LeBronomics: How the King helps local business
Cleveland restaurants, ticket sales score big with James on team
LeBron James has proven that he doesn’t need the Cleveland Cavaliers to win a NBA championship. But boy – Cleveland sure does like to have James in town.
And it’s not just for a shiny trophy: local restaurants, ticket sales and general buzz have all greatly benefited from his presence.
With James opting out of the final year on his contract and becoming an unrestricted free agent, basketball fans and Clevanders alike will be carefully monitoring the news and social media to see where “The King” ends up when the NBA free agency officially begins Sunday. Currently, the five most-floated landing spots are the Boston Celtics, Houston Rockets, Los Angeles Lakers, Philadelphia 76ers and of course, Cleveland.
Cleveland is much smaller than those other cities. The city had a population of 385,525 in 2017, according to U.S. Census Data, a 19 percent drop from 478,403 residents in 2000 and a nearly 60 percent slide from 914,808 in 1950. Meanwhile, Los Angeles had almost 4 million residents. The other cities range from 685,094 to 2,312,717 residents.
Cleveland, due to its size, would not receive much national attention if it weren’t for James, says John Barker, president and CEO of the Ohio Restaurant Association.
“He creates a national buzz in a city that normally wouldn’t have one,” Barker said. “A lot of out-of-town media is showing up and is bringing entourages.”
What James has done for Cleveland
Born and raised in Akron, Ohio, James played basketball at a prestigious local high school and immediately became a star after being selected by the Cavaliers with the No. 1 overall pick in the 2003 NBA draft. Dubbed “The Akron Hammer,” he dazzled in his home area – eventually leading the Cavaliers to the NBA Finals in 2007. Then he left for the Miami Heat in 2010 and returned to the Cavaliers in 2014.
While James’ success on the court is undeniable, what might be less apparent is how helpful he has been to local businesses, particularly restaurants.
According to a 2017 study by Daniel Shoag, a professor at Case Western Reserve University and Harvard, and Stan Veuger, a resident scholar at the American Enterprise Institute, James’ return to Cleveland in 2014 after departing for Miami in 2010 boosted the number of restaurants in the area.
The study states that within a one-mile radius of the Cavaliers’ Quicken Loans Arena, the restaurant total spiked from roughly 165 to above 210 when James came back.
“When you walk around in the downtown during basketball season, they (casual dining and restaurants) are definitely advertising those game nights,” he said. “It’s all about the Cavs and LeBron. They are living on that opportunity.”
Not only has James helped restaurants around the arena, but he has also stimulated ticket sales within the stadium.
Online ticket exchange company StubHub told CBSSports.com earlier this month that four of its top five seasons for Cavaliers ticket sales occurred during James’ second run with the team. Moreover, the average purchase price for Cavaliers tickets during James’ first season back increased by roughly 80 percent to $107.90 from $60.03 the prior season.
But while James has increased prices and business in certain areas, his overall economic impact in Cleveland is overstated, Allen Sanderson, a senior lecturer in the department of economics at the University of Chicago, said.
Sanderson gave several reasons for his view. First, many owners of professional sports teams have investments outside of their own cities, meaning money earned by any franchise “leaves the community.”
And though local restaurants near the Cavaliers’ arena benefit, the Cleveland metro area does not, he added. This claim is backed up by Shoag’s and Veuger’s study, which found that areas further from the stadium do not see the same restaurant boost as those nearby.
The popularity of sports teams “don’t affect the amount of beer sold,” Sanderson said. “They just affect where it gets sold.”
What Cleveland loses without James
Cleveland has already lost James once – and the results on the court weren’t pretty. Cleveland went from having the league’s best record in the 2009-2010 season to the league’s second-to-worst the following one.
Cleveland’s ticket sales also were far from a slam dunk when James headed to Miami. According to ESPN’s NBA Attendance Report for the 2009-2010 season, the Cavaliers were at 100 percent. However, in its report for the 2013-2014 season, ESPN reported that the Cavaliers were at 84.3 percent capacity.
With fewer fans piling into the Quicken Loans Arena, restaurants in Cleveland saw decreased demand. Shoag and Veuger reported in their study that while the one-mile radius outside the arena had over 190 restaurants in 2009 before James left, that number fell to roughly 165 in 2014. Yet, the impact of James leaving Miami was less devastating for its restaurants, the study reports. In James’ final season in 2014, the Heat had over 250 restaurants; and the following season, that number marginally declined to slightly below 250.
With Cleveland seeing larger fluctuations in restaurants due to James’ departure and arrival than Miami did, Shoag told USA TODAY that the star matters more to Cleveland than he would to other larger cities.
“He means more to the city (Cleveland) and more to the team in terms of that positive growth,” Shoag said.
Follow USA TODAY intern Ben Tobin on Twitter: @TobinBen