Five cities court LeBron James with economic stakes beyond the court

LeBron James is entering his 23rd NBA season with five markets competing for his next contract, Fortune reported. The chase matters beyond basketball because studies and franchise data show James’ arrivals have coincided with gains for nearby businesses, team valuations and local revenue.

Fortune identified the Bay Area, Minnesota, Philadelphia, Miami and Cleveland as the leading suitors for the 41-year-old star. The report said Miami and Cleveland are pursuing reunions, while Philadelphia, Minneapolis and San Francisco have also become contenders.

Each potential destination carries a basketball case, according to Fortune. Golden State would pair James with Stephen Curry, Minnesota has James’ Olympic teammate Anthony Edwards, and Philadelphia has a core that Fortune said was strengthened by a trade for Jaylen Brown from Boston.

Studies point to local gains around James’ teams

A 2018 American Enterprise Institute study found that James had a measurable positive effect on businesses close to his home arenas. AEI said restaurants and similar establishments within one mile of the arena saw a 13% increase, while employment at those businesses rose 23.5%.

Fortune compared that effect to the way major entertainers can draw spending into a city. The report said that pattern helps explain why teams and cities see James as an economic prize even late in his playing career.

James has played for the Cleveland Cavaliers, Miami Heat and Los Angeles Lakers. Statista data cited by Fortune showed the Cavaliers were valued at $222 million in 2003, before Cleveland drafted James, and reached $477 million in 2009 during his first stint with the team. After he left, the team’s value fell to $355 million, according to the same data cited by Fortune.

Miami also saw a sharp rise after James joined the Heat in 2010, according to Statista figures cited by Fortune. The franchise’s valuation went from $188 million to $364 million over his run there, which Fortune described as the largest four-year increase in Heat history up to that point.

With the Lakers, Fortune reported that James generated more than $500 million in revenue over his five-year contract. Forbes data cited by Fortune showed the Lakers’ valuation rose from $3.7 billion to $10 billion during his time in Los Angeles.

League growth complicates the picture

Fortune noted that James was not the only reason NBA franchises became more valuable. The league’s broader business grew through larger media deals, international audiences, sponsorships and new investors.

The NBA’s nine-year, $24 billion television deal with ESPN and Turner Sports began in the 2016-17 season, Fortune reported. The league has also announced an 11-year, $76 billion national media rights agreement beginning with the 2025-26 season, according to the NBA.

Formswift projected in 2018 that James would bring nearly $400 million in total local economic impact to Los Angeles and almost $30 million in state tax revenue, Fortune reported. ESPN attendance data cited by Fortune also showed increases at home games after James joined teams.

James’ decision could also relate to his plans after retirement. Fortune reported that he has publicly said for years that he wants to become an NBA owner, following a path similar to Michael Jordan’s.

Active NBA players are barred from owning franchises under current league rules cited by Fortune. The report said future expansion in the United States or a possible NBA Europe could create openings after James’ playing career ends.

This story draws on original reporting from Fortune.