Let's say you run a city. You have the option of either: 1. Having a star athlete start (or restart) playing in your city, or 2. Hosting an event that will bring thousands of people to town for a week. Which do you choose?
Cleveland, God bless them (for once), didn't have to pick. But if it had, it would have picked the return of LeBron James, which, according to county officials cited by Bloomberg, stands to provide much more of a windfall.
That makes sense in theory. LeBron will (presumably!) be around for a while, playing games in the city 41 times a year and generating attention for Cleveland even when he's playing games elsewhere. And who knows! Maybe there will even be a championship series in Cleveland, which would bring a lot of people to town for a week or so, just like the convention. All of that ancillary LeBron action, Cuyahoga County figures, is worth $500 million annually to the economy.
The Republican convention, slated for the early summer of 2016, will raise a comparatively modest $200 million in that year. Ergo, LeBron James is worth 2.5 Reince Priebuses. (On the basketball court, perhaps even more than that.)
And now, in the spirit of Cleveland's weather, we would like to rain on the LeBron James parade a little bit.
Here are two graphs using data from the Bureau of Economic Analysis showing the GDP per capita and actual GDP for entertainment in three cities: Cleveland, Columbus, and Pittsburgh. Directly underneath the second graph is the key showing which is which. The challenge, though, is to try and spot Cleveland from among the three. We've marked the years LeBron first played for Cleveland in order to assist you.
Did you guess that the blue line was Cleveland? That would have been a good guess. But you would have been wrong. That is Pittsburgh. The red line representing Cleveland dipped slightly in 2011 in that second graph, but quickly rebounded. Was that dip LeBron-related? It's hard to say. But the increase in this sector between 2001 and 2004 was minimal. The benefits LeBron brought (and will bring) to Cleveland extend beyond arts and entertainment: he'll fill restaurants and sell jerseys and so on. (The county figures about half of the $500 million will come from ticket sales.) But don't expect either of those red lines to spike, just as they didn't the first time around.
Which doesn't mean King James is not worth two-and-a-half Republican conventions. In June, when Cleveland was battling Dallas for the honor of hosting the next Republican nominee, we looked at GDP changes in host cities before and after the convention. The effects were negligible. Because economies are big and an individual event -- even when it itself is big! -- are fairly small.
So what should city leaders choose? As in the case of Cleveland: Whatever they can get that will help move money into the economy. But don't be surprised if initial predictions turn out to be a bit rosy.
This also applies to NBA championships.