Economic, Hoops Hopes for Many in Cleveland Pinned on Star LeBron Staying Put
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JUDY WOODRUFF: And next, another sport stories of sorts: why the economic hopes of a Midwestern city are tied to the fortune and decision of a basketball superstar, a guy by the name of LeBron James.
Economics correspondent Paul Solman has the story. It’s part of his series on Making Sense of financial news.
PAUL SOLMAN: The Cavaliers, red-hot attraction in Cleveland, Ohio, the past few years and key to the city’s efforts to rebound from Rust Belt ruin to post-industrial prosperity — leading the charge, local high school phenom, now league MVP LeBron James, the reason Cavs sell 20,000 seats a game at, on average, $80 each, some million-and-a-half dollars a night.
In a global economy, James is a global draw, the Baryshnikov of buckets, Houdini of hoops, Rembrandt of the rim. But the king of the court’s contract is up July 1, freeing him to sign with any team in the league for millions of dollars and the brighter lights of a bigger city.
And thus the economic question that’s put Cleveland on hold has become the talk of the sports world. Will LeBron go or stay put, set Cleveland back or help restore something of its glorious past?
A Great Lakes port on the Cuyahoga River, Cleveland was once home to steel mills, car plants, manufacturers galore. Its art museum still boasts splendors from the fat years, Monet’s Water Lilies, Frederic Church’s Twilight in the Wilderness.
Cleveland’s twilight came in the 1960s, kicked off by an oil and debris fire on the Cuyahoga River, which became a parody pop hit, making Cleveland a national joke. As Ohio industry lost out to cutting-edge competition from elsewhere, so did Cleveland’s sports teams.
But, then, in 2003, along came James, who grew up in Akron 30 miles south of Cleveland and is now a potential selling point for region in an increasingly service-driven global economy.
Team president Len Komoroski says James has helped turn the Cleveland Cavaliers into an international brand.
LEN KOMOROSKI, president, Cleveland Cavaliers: We have fans who come here and make the sojourn to Cleveland from all over the world. We are one of the most heavily televised teams in our league, both nationally, as well as internationally. And even in China this past year, we were on 34 times in China.
PAUL SOLMAN: With a TV audience in China of 100 million a game.
Restaurant owner Terry Tarantino recalls his travels to Turkey eight years ago.
TERRY TARANTINO, owner, La Strada: No one really knew where Cleveland was. They knew it was — maybe was it — is it close to New York? Is it close to Chicago? Now LeBron James gets on the team. Where you from? I’m from Cleveland. You ever hear of Cleveland? Come on man, I know Cleveland. LeBron James.
PAUL SOLMAN: Pre-LeBron, the Cavs sold less than 12,000 seats a night, now almost double that. Throw in all the extras you buy when you spend hours at the arena, the now-soaring TV revenues, suites for the high rollers.
And how much if my company buys one of these for a year?
LEN KOMOROSKI: It will range somewhere between $300,000 to 400-some-thousand dollars a year.
PAUL SOLMAN: It makes James worth for more than the $16 million a year the Cavs pay him and maybe even more still to Cleveland, Ohio.
DOUG PETKOVIC, co-owner, Lola: LeBron definitely brings a different crowd down here, a good crowd.
PAUL SOLMAN: Good?
DOUG PETKOVIC: A good-spending crowd.
PAUL SOLMAN: Doug Petkovic co-owns upscale Lola, a minute from the Cavs’ arena on a street that’s now hopping.
DOUG PETKOVIC: Would we be hurt if LeBron is not playing and those people are not coming? We would certainly feel some of that impact.
PAUL SOLMAN: Just up the block, Flannery’s. So, pre-LeBron. LeBron.
CHRISTINE CONNELL, general manager, Flannery’s: Wow, big difference. We weren’t a basketball town. Flannery’s would get four to six tables in here, sometimes 20, big night. When LeBron came, we went to an hour wait for a 7:00 game, doing 400 to 600 dinners, so, huge.
PAUL SOLMAN: Soccer plans packed Flannery’s when we were there, but LeBron anxiety was still in the air.
How much of a difference does it make economically to Cleveland if LeBron leaves?
MAN: It just has a huge, huge difference in the way people feel.
WOMAN: I think it’s going to be a tremendous deal. I think everyone knows it’s a huge economic loss, I think, for the whole city of Cleveland if he leaves.
PAUL SOLMAN: Consider the TV audience, says the Cavs president.
LEN KOMOROSKI: People who have never been to Cleveland before, this is what they see. And they see these beautiful shots of a city. And you can tune into any game that we have and you’re going to find examples of this.
PAUL SOLMAN: The value of the imagery? Priceless, says Cleveland mayor Frank Jackson.
FRANK JACKSON, mayor of Cleveland, Ohio: And there’s no way that you can pay for that kind of marketing in China or in Europe.
PAUL SOLMAN: Or anywhere in America.
FRANK JACKSON: Anywhere in America, you couldn’t pay for that.
PAUL SOLMAN: No wonder local Cleveland officials and celebs actually made a “We Are LeBron” Internet video, pleading with their 26-year-old meal ticket.
MEN AND WOMEN (singing): Please stay, LeBron. We really need you. No bigger market’s going to love you half as much as we do.
PAUL SOLMAN: Copyright issues have since removed the video from most Web sites, but Clevelanders refuse to be silenced.
WOMAN: LeBron, you should stay because we love you and you love the city. Hands down, that’s it, end of story.
MAN: Stay, baby. We love you, man. We love you.
PAUL SOLMAN: And you need him?
MAN: And we definitely need him.
PAUL SOLMAN: Major Jackson, now in his second term, has resolved to revive a city riddled with subprime foreclosures. James taking the Cavs to the playoffs five straight years has been a real help.
FRANK JACKSON: The average person on the street is still suffering. And, as a result of that, the cities are still in financial situations that are not too healthy for us. And, so, to have this kind of pride and to have this kind of success, it really, in many cases, helps people in cities and institutions get past the moment.
PAUL SOLMAN: Kent State Professor Mark Lyberger has put a number on the team’s value to the city.
MARK LYBERGER, professor, Kent State University: You look at 98-point-some million that the Cavaliers generate in revenue, and we plug those into the equation, when we look at everything across the board, there is a significant economic impact. It’s about $140 million.
PAUL SOLMAN: A year.
But beyond the immediate cash boost to Cleveland, the Cavaliers franchise has grown by more than $200 million in value since James arrived. And then there’s the psychological lift the mayor mentioned, which by itself can lead to more spending, more investing, and a higher quality of life.
MARK LYBERGER: Unless we did a survey to interview consumers on the street and ask that specific question, it would really be difficult to quantify that.
PAUL SOLMAN: So, we did a survey, collecting anecdata. How much would random Clevelanders be willing to pay if that would somehow keep LeBron?
WOMAN: I don’t think I would pay anything.
WOMAN: Probably zero.
PAUL SOLMAN: Eavesdropping, restaurateur Tarantino thought these customers were nuts.
How much would you personally pay out of your own pocket?
TERRY TARANTINO: How much would I pay out of my pocket? Probably $1,000. I don’t know.
PAUL SOLMAN: And he wasn’t the only big spender.
MAN: I would go $5,000 for LeBron.
PAUL SOLMAN: Now, league rules allow the Cavs to offer LeBron $30 million more than any other team. So, as another Cleveland icon might now be wondering, will he or won’t he?
Sports writer Brian Windhorst.
You wrote a book about him. You know him. What’s he going do?
BRIAN WINDHORST, “Cleveland Plain Dealer”: I think he will make a lot of people here sweat. And I think he will give a lot of people in other cities hope, but I think, ultimately, he stays home, because it is home.
PAUL SOLMAN: LeBron’s hometown of Akron, struggling economically as well. The rubber city has also put on a full-court press and last week threw its own LeBron appreciation day.
WOMAN: LeBron, you have to stay here. You’re our king. You’re our hero. Bring that ring to Cleveland.
PAUL SOLMAN: It will be a banner day for the Northeast Ohio economy if he sticks around to give Cleveland a shot.
JUDY WOODRUFF: You listening, LeBron?
Well, the city anxiously awaits a deadline one week from today. That’s when LeBron James’ contract expires, and he can begin negotiating with any team.