LeBron James and the $500 million-plus sweepstakes: 5 teams race to boost their economy

The Bay Area, Minnesota, Philadelphia, Miami and Cleveland have emerged from the pack and are openly vying for the King’s contract, with hundreds of millions, let alone a shot at an NBA championship, at stake.

According to a 2018 study by the American Enterprise Institute, James has left a Taylor Swiftian macroeconomic trail behind him. AEI called it a “statistically and economically significant positive effect” on the economies within a mile of the stadium where James has played.

Researchers from the study found a 13% boost to restaurants and other similar establishments within a mile of James’ home stadium, and employment at those establishments jumping 23.5%.

James has played for three teams throughout his illustrious career: the Cleveland Cavaliers, close to his hometown of Akron, Ohio, the Miami Heat, and most recently, the Los Angeles Lakers. Cleveland and Miami are both reportedly courting a James reunion, while Philadelphia, Minneapolis and San Francisco inserted themselves as strong contenders.

Each has its on-court merits: the Golden State Warriors features James’ one-time rival turned close friend Steph Curry, the Minnesota Timberwolves have Olympian teammate Anthony Edwards, and the Philadelphia 76ers have a strong core, boosted by the recent trade for Jaylen Brown from the Boston Celtics.

A close look at the impact James had on previous markets offers an idea of why they’re bidding for a man closing in on a quarter-century as a pro.

LeBron doesn’t just sign contracts, he makes franchises

Cleveland saw the largest impact from James’ superstardom. As a smaller market, the allure of having a global phenom brought millions in economic value. 

Before drafting the future four-time MVP, the Cavaliers had a valuation of $222 million in 2003, according to Statista. The team incrementally increased in value to a peak $477 million valuation in 2009 during his tenure, a near 115% increase and making them the fifth most valuable team in the NBA at the time. When he left, the value dropped nearly 25% to $355 million.

When James joined Miami following the 2010 season, the franchise’s revenue skyrocketed from $188 million to $364 million, a 112% increase and the largest valuation increase over any four years in franchise’s history to that point.

James’ third decision came when he announced he would take his talents to Los Angeles after his second stint with Cleveland. With the Lakers, he brought over $500 million in revenue over his five-year contract as well as increased the franchise’s valuation from $3.7 billion to $10 billion.

According to a study done by Formswift, James was projected to bring nearly $400 million in total local economic impact to the city of Los Angeles in 2018 and nearly $30 million in state tax revenue.

James’ arrival has coincided with the dramatic increases in franchise values due to an unprecedented boom in the NBA’s business.

Not all of this growth is solely attributed to James, however. Since the early 2010s, league-wide valuations also surged as teams secured richer national television contracts, expanded global audiences, signed lucrative sponsorship agreements, and benefitted from an influx of institutional investors.

Previous media rights deals opened up larger revenue streams for the NBA, including a 9-year, $24 billion TV deal with ESPN and Turner Sports in the 2016-17 season. Deals like these drastically increased the salary cap and set new benchmarks in expansion in the league.

The NBA’s current 11-year, $76 billion national media rights agreement beginning in the 2025-26 NBA season is expected to further accelerate this growth.

But James clearly plays a role in securing those national television contracts and global audiences, as his tenure on every team saw historical growth in valuation.

ESPN reports also show that home game attendance increased with the addition of the superstar in the past, with each of the teams he has joined seeing a jump in fan attendance.