How LeBron James' Return to the Cleveland Cavaliers Could Net Them $50 Million a Season

LeBron James will certainly help the Cleveland Cavaliers play better basketball, but his presence will have a huge economic impact as well. A conservative guess estimates he could be worth more than $50 million each year.

David Stegon
David Stegon
Jul 14, 2014 at 11:13AM
The Business

Cleveland Cavaliers fans had a cheap ticket last season, but with the return of LeBron James, the Cavs are in position to turn fan enthusiasm into cold hard cash. How much? Let's figure it out.

Cavs games have been cheap
To attend a Cavaliers game last season, a family of four would have spent $222.67, according to the "total family cost" metric used by NerdWallet. That comes from adding the median resale ticket price of four seats, along with the arena's average price for a 16-ounce beer, a 16-ounce soda, a hot dog, and parking.

Attending a Cavaliers game for a family of four cost $40.17 less, on average, than the next-lowest team, the Indiana Pacers. It was about half the NBA average of $442.28 per family, and just 25.3% of the New York Knicks' $878.20, the NBA's priciest.

That $222.67 cost for the Cavs breaks down to about $55.67 per person. If you combine that with last year's home attendance at Cavaliers games, the team brought in approximately $39.5 million for its 2013-2014 home games, without LeBron.

A rise in ticket price should be expected
That average ticket cost of $42 ranked the lowest in the league. Ticket prices in Cleveland had gone down each of the four years since LeBron left for the Miami Heat.

With LeBron back, expect those numbers to jump back up. Some have said the Cavaliers could rival the Knicks and Lakers for the league's most expensive tickets with LeBron to showcase. I wouldn't go that far, because LeBron has already played in Cleveland, and the tickets maxed out around $55.

Perhaps, though, the tickets could reach the average $78 the Miami Heat charged fans the past four years. That would still be $18 below the league average, and it seems within reason. Miami is the nation's 16th largest media market in the U.S., while Cleveland comes in at 17 -- and fan enthusiasm for the Cavs is now at an all-time high.

Assuming Cleveland hikes its prices that high, it could mean an additional $25 million on what they made last year.

A jump in attendance
Of course, that number is assuming attendance in Cleveland stays at last year's level.

The Cavaliers brought in an average of 17,329 paying fans last season -- 16th in the league -- to see a team that went 33-49 and missed the playoffs.

In 2010, LeBron's last season in Cleveland, the team averaged 20,562 fans, the second-highest total in the league. With a likely winning team and the game's biggest superstar, it is safe to say the number will again reach that level. After all, the Cavaliers sold $1 million in season tickets on Wednesday solely on speculation that James would return.

Those extra fans paying for a higher-priced ticket could bring in another $12.7 million beyond the $25 million the team would get for raising prices.

Hoping for a playoff run
Those numbers are for the regular season. With James' return, fans can now dream of championships once again.

In his career, the teams James played for made the playoffs nine times, playing a total of 158 games, an average of 17.5 per season. If the Cavaliers played 18 playoff games each year – with nine of them coming at home – that would be an additional boost.

Playoff ticket prices are hard to calibrate, as the numbers jump significantly the further a team goes. For a conservative estimate, let's say the Cavaliers double, on average, their marked-up regular season tickets, bringing the average ticket to $156. With a sold-out arena, that could bring in an additional $14.5 million in revenue.

The bottom line
So what does all this add up to? With the Cavaliers getting an additional $25 million for raising tickets, $12.7 million for increasing attendance, and $14.5 million for hosting games during a semi-serious playoff run, the team can easily expect a $52.1 million boost each season James stays with the team.

That does not add in other potential moneymaking factors such as increased local television revenue or higher prices for team sponsorships. It also excludes the potential boost to the overall value of the team. Two years after LeBron left for Miami, Forbes dropped the Cavaliers' value from $476 million to $329 million, while the Heat's value rose from $364 million to $770 million.

Exactly how much LeBron ends up bringing in for the Cavaliers is up for debate, but as you can see, the possibilities are great.