LeBron James’ Value Off the Court
This past season, LeBron James earned nearly $37.5 million from the Los Angeles Lakers, and in the next couple of seasons will see his salary rise incrementally by just under $2 million. James fulfilled his promise of bringing a championship to Los Angeles, and is one of the greatest players of all time, but is he worth the amount he is being paid? $37.5 million seems like a crazy amount to give to a man playing a kid’s game. The truth is, James’ value to his team off the court has truly been ignored throughout his career, as teams’ values seem to jump with him on their teams.
In 2003 LeBron James was drafted to the Cleveland Cavaliers, who that season were valued at $222 million. In 2010, when James left to join forces with Dwyane Wade and Chris Bosh, the Cavaliers were valued at $476 million (a $254 million increase), more than double what they were worth just seven years prior. James’ effect was not only on team value; it also spread to the city of Cleveland, as his presence helped boost the economy of Cleveland, as crazy as that may seem. A professor of economics at Harvard found that food and drink establishments within a mile radius of the Cavs’ arena experienced a 13% increase in business during games, and employment in that area was up 24%.
When James joined the Miami Heat in 2010, they were valued at $364 million, and when James departed the Heat in 2014, the Heat were worth $770 million (a $406 million increase). James’ presence was such an addition to the Heat that again he was able to double his team’s value during his tenure there, this time doing it in just four years.
Following his stint with the Heat, James rejoined the Cavaliers, whose valuation had increased from $476 million in 2010 when James left to $515 million in 2014, a $39 million increase in those four years. James’ returning presence made a difference; the Cavs’ valuation skyrocketed to $1.1 billion in 2016, an increase of $585 million in two years after increasing just $39 million in the four years without James. By the time James left the Cavs in 2018, they were worth $1.325 billion, over $800 million more than they were worth before James returned four years prior.
After those four years in Cleveland, James joined the Los Angeles Lakers in 2018, whose valuation was $3.3 billion. This year, the Lakers’ valuation is $4.4 billion, more than a $1.1 billion increase in the two years James has been on the team. In comparison, Kobe Bryant’s impact on his team’s valuation from 2003-2016 was $2.3 billion, two times as much as James’ impact, but in 12 more years.
LeBron James’ importance to his team’s valuation can be broken down into a few different reasons. Firstly, fan attendance with James on the roster jumps up, as fans want a chance to see James play live. In 2009-10, James’ last year with the Cavaliers, the Cavs’ fan attendance was at 100%, while in 2013-14 the Cavs’ fan attendance was 84.3%, towards the bottom of the league. In 2009-10, the year before James joined the Heat, the Heat’s attendance was 90.5%, and in 2013-14, his last year with the team, their attendance was somehow at 100.9%. Having a player like James, who almost guarantees sold out tickets, helps the team itself make a lot more money as teams can make as much as $4 million in ticket revenue per game. In fact, within hours of James’ announcement that he would be returning to the Cavaliers in 2014, the Cavs sold out of season tickets.
However, this revenue each team can make per game does not even include non-ticket revenue each game brings in, such as food, jerseys and parking, which James also has a large effect on. In Cavaliers’ home games, especially very important ones such as the NBA Finals, one out of every four merchandise, on average, had James’ number 23 on it.
James’ effect also spreads to TV, as his teams get a lot more prime-time TV slots. In 2013-14, James’ last year with the Heat, the Heat were on national TV 35 times, the maximum allowed by the NBA, while the Cavaliers were on just twice that same season.
Regardless of what people think of LeBron James as a player, I think it is safe to say that James is the most valuable player off the court of all time. While teams would love to acquire James’ services on the floor as he can help lead them to an NBA title, they also would love to have him join their team to help increase their valuation.
Photo Caption: LeBron’s trademark one-handed dunk
Photo Credit: Pixabay.com