July 14 (Bloomberg) -- Landing LeBron James will mean 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 have a $500 million a year impact on the local economy, with a boost from additional ticket sales and other spending, County Executive Ed FitzGerald said today. The 2016 Republican National Convention in the city will bring an additional one-time windfall of $200 million, he said.
“It generates real money for the local economy,” FitzGerald, a Democrat running for governor this year, said in an interview after a press conference in Cleveland.
James, 29, played for the National Basketball Association’s Cavaliers for seven seasons before leaving in 2010 for Miami, where he helped lead the team to a pair of championships. He said on July 11 he was returning, three days after the Republican National Committee announced 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’s return will increase the benefit from Cavs games alone to about $268 million. 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.
The effect of having a more robust Cavaliers with James playing increases the total economic impact to about $500 million a year with direct and indirect spending, he 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 (64 kilometers) 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.
To contact the reporter on this story: Mark Niquette in Cleveland at email@example.com
To contact the editors responsible for this story: Stephen Merelman at firstname.lastname@example.org Stacie Sherman