For LeBron James, business is good — both on and off the hardwood — and now he’s bringing his talents to the Los Angeles Lakers.
These days, pro athletes aren’t just what they do on the court. They’re brands, looking to dominate both the sports and business worlds, and James is a perfect example of this.
As the most popular basketball player in the world, he will earn over $35 million playing for the Lakers during the 2018-19 NBA season, but that number is dwarfed by his lucrative endorsement deals. Estimates figure these endorsements bring in around $55 million per year to James. Overall, he has a net worth somewhere in the range of $440 million, and the cash figures to continue rolling in now that he is a Laker with a four-year deal worth $157 million.
The Lakers will be more than happy to fork over that cash because, despite James’ massive deal, he is actually a ridiculous bargain compared to the value he brings.
James is a money-making machine, generating well over the cost of his contract, which means that the Lakers, a franchise worth $3.3 billion according to Forbes, is on the cusp of becoming even more flush with cash.
That said, it’s difficult to put an exact number on what James is worth to the Lakers, partially because every franchise is different.
James took his talents to South Beach in 2010 and for one defiant season, the Cleveland Cavaliers’ attendance numbers stayed strong, only dropping by about 19,000 for the year or an average of roughly 450 per home game. Throwing out the lockout-shortened 2011-2012 season, the team’s numbers plummeted in 2012-2013, losing over 4,000 people on average per night and nearly 200,000 total compared to James’ final season, a number that didn’t truly rebound until he returned in 2014.
The good people at ticket resale marketplace SeatGeek provided Lakers Nation with their figures on the impact James had on Cavs tickets on the secondary market and found that a ticket cost on average $101 in 2013-2014, the season before James returned.
In 2014-2015, James was back and ticket prices surged by 130 percent, rising to $232 per ticket.
That’s a huge swing in value directly tied to the presence of the game’s most popular player.
The Lakers, however, are not the Cavs. They have long been a fixture in Southern California and their games are a place for the elite to be seen. They haven’t made the playoffs in five years but their regular season attendance numbers have barely budged.
In other words, now that the Cavs have lost James, there will be plenty of open seats at The Q, but the Staples Center in Los Angeles will look pretty much the same as it always does — full.
For Cleveland, no James means fewer people spending money in restaurants and shops near the arena and potentially fewer jobs as a result. In Los Angeles, with Staples Center full regardless of James’ presence, that effect wouldn’t be nearly as dramatic.
That said, the concepts of supply and demand would still play their part.
The Lakers have one of the priciest tickets in the league already, and those seats will become that much more in demand now that James is on board. As demand rises, so too does price.
This isn’t a new concept. Prior to Shaquille O’Neal’s arrival to Los Angeles in 1996, the cheapest ticket sold at the Great Western Forum — the former home to the Lakers — cost $9.50. The year O’Neal arrived, those tickets more than doubled, jumping to $21 to see O’Neal in action.
SeatGeek projects a 75 percent increase in the cost of Lakers’ tickets on the secondary market thanks to James’ presence. In real numbers, the average cost of Lakers’ tickets last season was $168, but SeatGeek predicts that will rise to a whopping $294 to catch a game at Staples Center next season.
The rise in the demand and thus price of Lakers tickets will bring tens — or perhaps even hundreds — of millions more in revenue to the Lakers. Again, James will make just over $35 million in salary.
That’s not including playoff revenue. The Lakers are now expected to make the playoffs next season and assuming that happens, they will be guaranteed at least two home games and the extra revenue those high-priced events bring. Should they make it all the way to the NBA Finals, they would host at minimum eight extra home games, which would give them yet another influx of cash.
Then, factor in merchandise. Last season, James had the second-highest number of jerseys sold in the league. Meanwhile, the Lakers, who were lacking a star, didn’t have a single player land in the top 10, yet still finished fourth in the league in overall merchandise sales. That’s the power of the Lakers’ brand, and now they have James in their colors.
Translation? It would be an absolute shock if James’ Lakers jersey wasn’t the top seller in the league next season by a wide margin. ESPN is already reporting a 600 percent increase in James jersey sales compared to when he returned to Cleveland in 2014.
Jersey sales are added into the league-wide Basketball Related Income figure so it wouldn’t go directly into James’ or the Lakers’ pockets, but still, already-popular team merchandise will be in very high demand once again. What it all translates to is even more money flowing towards Los Angeles.
Make no mistake, the arrival of James is a monumental day for the Lakers. On the court, the rebuild is over. It’s time once again for the Lakers to win.
Off it, James’ presence will be just as impactful. A franchise that already prints money now has a proven superstar to rake in the cash.
After five years of the uncertainty that rebuilding brings, the Lakers are back and the brand has never been more valuable than it is right now — with LeBron James in purple and gold.
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