LeBron James makes the Cleveland Cavaliers a billion-dollar franchise, almost double what the team would be worth without the four-time National Basketball Association Most Valuable Player.
“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,” said valuation expert Peter Schwartz, managing director of venture capital at Boston-based Christie & Associates LLC.
The addition of James, the league’s biggest star and a worldwide marketing force, will boost the team’s revenue in all areas, including ticket and merchandise sales and sponsor value, said Chad Estis, a former chief marketing officer of the Cavaliers.
When the native of Akron, Ohio, joined the Cavs as the No. 1 pick in the 2003 draft they were in the “low, low, low end” of league revenue, Estis said. Eventually, he said, the club was in the top 10.
“For a mid-size market, the revenues were outperforming the market,” said Estis, who is now president of global sales for Legends, a sports and entertainment company owned by the Dallas Cowboys and New York Yankees. “You get to a point where everything will be sold out, then you increase prices, certainly local sponsors, suite renewal is better if you win and the potential long-term effect for the brand if you win a championship.”
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