By: Twumasi Duah-Mensah
The superstar talent of LeBron James has created a worldwide following, with some even claiming that he is the greatest basketball player of all time. Therefore, it’s likely no surprise that in Cleveland, Ohio, James is like a cult figure.
LeBron has always strived to give back to his community. His foundation, the LeBron James family foundation, provided over $41 million in college scholarships for kids in Cleveland and Akron. He teamed up with Akron public schools to create a school for children who would otherwise be left behind. He even started working on a TV show called Cleveland Hustles, which combines a bit of The Apprentice and Shark Tank and aims to get small businesses the start-up chances they need.
Outside of this, what other ways has James impacted the economy of Cleveland? Could politicians create or advance industry in an effort centered around LeBron (i.e. a LeBronomy)?
James draws a great amount of tourism, which vitalizes local hotels that give tourists a place to stay, local bars and restaurants where native Clevelanders and tourists can watch the game, and other businesses whose products are sold at Cavaliers games. Cleveland has seen steady growth in tourism for seven years, suggesting that it’s time to strike while the iron is hot.
The unconventionality of sports add pros and cons to the investment in sports teams. There are not many industries in which the consumer base is more loyal. Even if the team performs poorly in a league or makes questionable executive decisions, consumers still support them. Therefore, you can count on a consistent consumer base that buys the team’s merchandise, goes to games, and follows the team on television, which increases ratings and validates a sports team to get a game on national television.
As mentioned, there are drawbacks to this investment, including fan interest suffering from economic shock. If tough times hit the US economy, all forms of entertainment will take a hit since consumers will focus more on securing essentials for long-term sustainability. The team’s success also affects interest and attracts new consumers.
For comparison, let’s take a look at the Green Bay Packers. They provide a sizable economic impact to Green Bay, Wisconsin when they participate in the playoffs. This generates a lot of tourism that would otherwise not exist in the winter. It also helps that there are likely more people showing up to playoff games at Lambeau Field, which is almost four times bigger than the Cavaliers’ stadium, Quicken Loans Arena. This leads to more jobs in hotel and restaurant industries, but the economic impact is still limited to those few industries and to a few days.
LeBron may have the same effect in marquee winter match-ups in the NBA, as tourism falls for many areas of the country during the winter. His team’s presence in the NBA finals also drives tourism up significantly, but these drivers also only last a few days.
Another big factor for Cleveland’s increase in tourism is its affordability and business start-up environment. It is emerging as an incredibly affordable alternative for small-business start-ups compared to Silicon Valley and New York, which also increases tourism. The centralized business hub, StartMart, attracts beginning entrepreneurs and allows for discussion and an exchange of ideas to occur. In 2015, according to DataFox. Cleveland was ranked as one of the top fifteen cities for business start-ups. Marketing this to tourists interested in business could bring more ideas for the local and state governments to invest in the sports team. It also allows for individuals to create lucrative business deals which encourage development efforts in Cleveland, a city recovering from the decline of the Rust Belt region.
One way or another, it seems that the increased tourism in Cleveland shows a bright future for one of Ohio’s largest cities, who had only recently been a laughingstock and the poster child of the Rust Belt’s decline. While LeBron has a substantial impact on the local economy at specific times, it only benefits a few industries and may not last much longer if the rumors of his exodus from the Cavaliers next summer prove true. It’s probably best to leave a “LeBronomy” to the creativity of the private sector. This creativity may be ignited by the new Quicken Loans Arena renovation project proposed by the city of Cleveland and the Cavs. Cleveland has also hosted several high-profile events, including the 2016 Republican National Convention, and has announced plans for new a global center of health innovation and a $350 million art museum renovation. The future may be bright after all for the Rock and Roll capital of the world.