Carl Koenemann discusses the economic impact of Lebron James's decision returning home to Cleveland.

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Economic Impact of
Lebron’s Homecoming
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By Carl Koenemann
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The city of Cleveland and its citizens were elated when the “King,”
Lebron James, decided to return his hometown team four years after
he infamously departed to showcase his talents in South beach. In fact,
it was the polar opposite reaction to Lebron’s Decision. Instead of
rioting and burning his jersey, the citizens of this Ohio city paraded
around in jubilation praising their hometown basketball product.
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3. Their joy did not only stem from
Lebron’s dominance on the basketball
court, but also from the boost he will
provide the city and state’s economy.
The question is how robust is this
increase in economic activity. Some
experts estimate that Lebron’s return
will engender an increase of more than
half a billion dollars in one year alone.
The “Return of the King” will also help
bring a return in jobs and a lower
unemployment rate.

4. The “Return of the King” will also help bring a
return in jobs and a lower unemployment rate.
The Cavaliers will easily cover his twenty million
dollar salary with the increase in ticket sales. If
Lebron’s previous tenure with the team is an
indicator, the Cavaliers will most likely sell out
every regular season home game. Cleveland fans
bought out all the available season tickets within
twenty four hours after he made the decision to
return home. In fact, demand is so large that the
organization has begun to create a raffling system
to give everybody in the city a relatively fair
chance of procuring a ticket to watch their
golden boy.

5. $250 Million - $500 Million
Varying estimates are out there regarding just how large the “Lebron
stimulus” is, but they range between $250 million and $500 million. In
order to achieve the upper limit, it must be assumed that all the
people who make money off Lebron will spend the extra-cash in
Cleveland, thus providing a high multiplier effect. If this estimate is
realized, more than 500 jobs will be created.
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6. Some argue that estimate is wildly over-estimated as it is only displacing
economic activity out of the suburbs into the city center. However, what
these type of estimates don’t account for is that Lebron is acting as an
ambassador for the city of Cleveland. Keynes famously noted how “animal
spirits - a spontaneous urge to action rather than inaction” are an integral
driver of economic growth. The return of their beloved king, Lebron James,
might suffice to satisfy these animals, spurring growth within Cleveland and
beyond.
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