In 2010, Cleveland Cavaliers owner Dan Gilbert labeled LeBron James’s exodus “cowardly” and “narcissistic.” Four years later, James returning to Gilbert’s employ has added nearly a half-billion dollars to the value of his franchise.
Then, Gilbert felt the pain in his wallet. Now, he feels his billfold bulge.
Bloomberg reports that the signing of LeBron James has nearly doubled the worth of the franchise. Forbes valued the Cavaliers at $515 billion earlier this year, good for 19th in the NBA just behind the Toronto Raptors and ahead of the Denver Nuggets. Bloomberg now puts the team above the billion-dollar mark. Gilbert couldn’t quite command $2 billion from a buyer, as the Sterlings will likely grab from former Microsoft CEO Steve Ballmer should the sale of the Clippers go through. But Cleveland just moved from the middle of the pack to the NBA elite as far as value goes.
“Certainly the brand itself, as well as the revenue that the team is able to generate, is much stronger with him–to the point of a billion-dollar franchise,” Peter Schwartz of Christie & Associates LLC tells Bloomberg. With James pocketing an expected $88 million over four years [UPDATE: ESPN now reports that James finalized a two-year, $42.1 million contract with a player out option after the first season on Saturday], Cleveland’s return on its investment seems to have paid off enormously and immediately.
Cleveland the city may benefit more than Cleveland the franchise. “LeBron is an event and an economy,” Nick Kostis, owner of Pickwick & Frolic, tells the Cleveland Plain Dealer. “When he left, Cavaliers games ceased to be events–and you’re talking 41 games during a regular season, many occurring during the middle of winter when people really need a reason to go out.”
In his explanation of his homecoming to Sports Illustrated, James obliquely recognizes his value to the community. “My relationship with Northeast Ohio is bigger than basketball,” James acknowledges. “I didn’t realize that four years ago. I do now.”