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‘LeBron effect’ has been the most potent economic impact during the 21st century so far. With three championships and four Most Valuable Player (MVP) awards to his name, LeBron Raymone James Sr is arguably the greatest or one of the greatest players to play the game of Basketball in History. Superstar players in the National Basketball Association (NBA) offer more to the city economy than an NBA championship.
‘Wherever King Goes Money Follows’ is a common phrase used by announcers to express no matter where Lebron James goes, the economic impact will be right behind him. Daniel Shoag, an associate professor of Harvard Kennedy School and Stan Veuger of American Enterprise Institute (AEI), reported businesses of several restaurants and bars that were established around Lebron’s home stadium had had a significant positive effect. Harvard studies state within a 1-mile radius of Lebron’s presence in Miami and Cleveland has increased the revenue of restaurants and bars by 12.8% and 13.7% respectively. Employment rates in those established have increased by 23.5%. Studies show that these ratings dropped all the down to 0% when he left the cities. For example, if Lebron is willing to be traded to New York Nicks for a 5-year deal, reports state that Lebron would have a $1.7 billion economic impact while bringing $1.2 million tax revenue and creating over 1,200 job opportunities in New York.
Moreover, the Cleveland Cavaliers (Cavs) was a non-existing team until 2003 until Cavs drafted the Cleveland born young high school basketball prospect, Lebron James, that flipped the lucky switch on for the city of Cleveland. Studies show the season before LeBron James got selected to the Cavs, Cavs were averaging 11,496 home crowd with 55.9% capacity ranking 29th in the NBA. However, in 2010 season, Lebron’s last season with Cavs before the returning, averaged whopping 20,562 home crowd with 100 % capacity and ranking in at 2nd place in the NBA. Lebron made sure there was no difference in the attendance when the Cavs were on the road game. According to the Cleveland official website, Cavs were averaging 16,087 before the 2003 draft. Then in the 2009-2010 season, Cavs averaged well over 19,200 away-crowd ranking 2nd in the NBA. Lebron effect caught up to the NBA season very quickly.
On the other hand, when Lebron James left Cavs in 2010, the average home crowd in 2012 was reduced down to less than 16,000 people per game. Darren Rovell of CNBC said, ‘Back in 2009-10, the Cavaliers required season-ticket deposits for the following season if fans wanted priority seating during the 2010 playoffs’. However, in 2012, Cavs couldn’t even come close to getting to playoffs. Also, the average ticket cost was dropped to less than $45. Some sources report, Cavs were able to capitalize on Lebron after he was gone, though, the statistics indicate the apparent financial loss. After, Lebron James took his talents to south beach and joined Miami heat, which caused economic influence in the Miami heat franchise like never seen before. Prior to Lebron’s announcement towards Miami heat, 90.5% capacity of a home crowd was getting behind Miami heat buying tickets worth of $3,238.61. After LeBron’s decision to join Miami Heat, which was watched by over 9.9 million people on ESPN, the ticket sales of the next Miami heat game went over $8,200.00 with 100% capacity. The revenue of Miami Heat was almost doubled from $188 million to 364 million. Lebron leaving Miami after five years left a scar in the Miami heat franchise. According to Forbes, the value of the Miami Heat went from $476 million to 355 million as soon as he left. As ESPN analysts, Darren Rovell and Brian Windhorst predicted the return of the primetime Lebron James to Cavs going to double the value of the franchise. The worth of Cleveland Cavaliers jumped from $515 million to $1.3 billion in a day. After studying all these figures, it is safe to say that Lebron James is walking bank due to the astronomical numbers he brings in to his team.
Similarly, the Lebron effect didn’t stop there. Lebron made himself money while he was producing money for establishments around him. Estimates suggest that Lebron James has made over $750 million with his endorsement deals and his NBA salary. In an article by the Business insider, Knowlton states the $1 billion life-long contract with Nike pays James with around $44 million a year while Nike makes approximately $300 million a year with Lebron’s signature shoes. The studies indicate that the Los Angeles Lakers sold 4th most jerseys in the NBA during the 2017-2018 season. According to the NBA store, with the arrival of Lebron James to the Lakers, the jersey sales went up by 600% within just 3 hours. This happened to be the most notable sale ever received by a player through free agency. However, some sport media articles argued that the 4 million population in Los Angeles compared to the 400,000 people in Cleveland was the primary reason to cause this outrageous sales gain. Although, some experts countered their argument stating that Lebron had the second most popular individual jersey sales in the 2016-2017 season.
In addition to the earnings he brings in towards companies and franchises, Lebron contributes to a tremendous amount of charity work. He never turns his back around to give back to his hometown, Akron, Ohio. He never forgot his humble beginnings, and he is more than happy to give back to those who in need. According to the ‘Lebron James: Five Humongous Charitable Donations │ Black EOE Journal’ article, Lebron made a full foundation called ‘Lebron James Family Foundation’ to raise and donate money towards several charities around the United States. The biggest charities that are depending on this foundation are the Boys and Girls Clubs of America, After-School All-Stars, the Children’s Defense Fund, Gabriel’s Angle Foundation, Muhammad Ali: A Force For Change, ONEXONE, and most recognizing The I Promise School.
During 2010, Lebron James was getting promoted by ESPN about the decision on his trade offers. The money that was generated by this production was donated directly to the Boys and Girls Clubs of America. Then Lebron made the Big decision to take his talents to the south beach and play for Mami Heat. While Lebron was playing for Heat, he was very engaged with the Boys and Girls Clubs in Miami. He managed to get the clubs to provide every child with fair chances and gives after-school classes and projects. Lebron James Family Foundation partnered up with Home Court furniture and presented the whole club in Miami with brand new furniture. They also replaced the roofs of the Miami club and renovated the children’s workspace. Lebron didn’t want one club to benefit from his foundations, so he managed to buy 1000 brand new computers for 59 Boys and Girls Clubs in America.
In the same manner, Lebron’s foundation started a program called ‘After School All-Star’ for kids of his hometown, Akron, Ohio. Lebron began to this foundation as ‘a bike-a-thon, ‘Wheels For Education’ to raise money for children in Akron to have help with education and a place to go after school’ (O’Donnell). However, with the massive support from Lebron James Family Foundation, the program developed to help kids from Akron in different methods. According to Nat Berman, the program was assisting the kids to mentor through school as well as activities outside of the school. The program was supporting kids with their reading, maths, and writing skills while discouraging them from dropping out of school. Studies state that this program has cost LeBron around $40 million. Lebron mentioned that ‘the goal is to keep kids in school and encourage them to graduate’. Recently, the University of Akron linked up with the Lebron James Family Foundation to give out scholarships that cover over $9,500 of the annual tuition per student. Around 800 children are currently taking advantage of this program. Lebron’s primary goal is to spread this program all around the state of Ohio.
Lebron’s most well-known charity work was done recently. The I Promise School that Lebron built for at-risk youth in Akron, Ohio. Lebron James pointed out talking with ESPN that ‘It’s not a charter school, it’s not a private school, it’s a real-life school in my hometown and this is pretty cool’ (Nichols). With that being said, I Promise School is very different comparing to a standard traditional public school. The I Promise School will be operated during the summer holidays to help catch up for kids that were behind. This school will provide activities for kids that suffer from different mental issues, such as stress and depression. Also, I Promise School will provide assistance to find jobs for parents. Most importantly, the school will provide free bikes, free meals, and college tuition for the University of Akron for those who graduate from the I Promise School. The opening of the I Promise School opened forty-three job opportunities as well. Lebron mentioned to ESPN that ‘I don’t have a ceiling to how much I can improve my game and we as a foundation don’t have a ceiling on how much we can improve our community, to a point where we have a school’.
By all counts, LeBron Raymone James Sr is more than a basketball athlete. He is an NBA superstar, businessmen, and also a generous philanthropist. Lebron James is on his way to be the greatest ever to play the game while breaking world records. The cities around wherever he gets traded to thrive because the company’s and franchise’s economic development are based on him. Anything that he does is affecting a whole economy around him. Still on his 30s, I believe Lebron James has a lot more to offer to the entire world in the coming years.
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