With LeBron gone, Heat lock up Chris Bosh
July 11, 2014A monarchy restored, but the subjects never left
July 12, 2014There’s no doubt the Cleveland Cavaliers instantly became a more valuable franchise yesterday. The only question would be how much more valuable LeBron James makes the team.
According to an article by Bloomberg News’ Scott Soshnick, we could be talking about a billion-dollar franchise. Soshnick spoke with a few experts in the field, including Peter Schwartz, a venture capitalist, and Chad Estis, a former chief marketing officer for the Cavs. They both were incredibly optimistic of how the team perhaps doubled in value.
“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,” Schwartz said.
Forbes estimated the team’s value to be $515 million back in January. Forbes’ Patrick Rishe expected the James return to add at least $100-150 million more. He noted that the team’s estimated value dropped by 26% back in 2010.
But Forbes — already an inconsistent estimator of team values, albeit one of the only public data sources — likely underestimates James’ massive impact in concert with the rapidly increasing values of NBA franchises. The Los Angeles Clippers sold for $2 billion recently to Steve Ballmer. The Sacramento Kings, a struggling organization that nearly moved from town, sold for $534 million last May to Vivek Ranadive.
NBA franchises are insanely valuable commodities because only 30 of them exist in the world, with so few ever coming close to the open market. Lest we forget, Dan Gilbert purchased the Cavaliers from Gordon Gund for an astounding $375 million in March 2005. After James’ departure, the team’s estimated value actually dipped under that mark. Now? Gilbert has to be one happy camper, banking in “The Return” with a glory period of skyrocketing values.
And if you didn’t see the news yesterday, the Cavs reportedly sold out of their entire allotted season ticket distribution for 2014-15 already. More than half of those 12,000 tickets were sold yesterday alone, according to reports from the Akron Beacon Journal’s Jason Lloyd and ESPN’s Darren Rovell. The rest of capacity for the Quicken Loans Arena, including partial season tickets, individual games and group sales, will be sold at a later time.
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(AP Photo/Tony Dejak)
9 Comments
This is why that dumb letter never made sense but it’s all over well not until LBJ inks that deal and I mean nothing could prevent that now right? Sorry it’s the Clevelander in me.
Anyways what’s the over/under on how many times the Cavaliers appear on national TV now? One drawback, this means ESPN and that horrible collection of personalities who do their basketball games. Oh well, I’ll suffer but only because it’s LBJ!
It’d be amusing if the Cavs said they only want TNT and NBATV at their games.
I can’t wait for opener!!!
I don’t care what this guy says. If Dan sold the Cavs right now he’d get much more than $1B.
Not so sure. Lebron is only signed for 2 years. Owners should be buying long term value. I would guess $800mil-$1bil depending on the bidders.
LeBron is in this for the long haul now. I don’t think someone negotiating a purchase of the Cavs could really play the “but his contract is only for two years” card with any success. So with the Bucks selling for $550M, and the Clippers for $2B, we have a pretty great idea of the value of a bottom tier team and a top tier team. Of course there is obviously a major difference between L.A. as a market and Cleveland, but I can’t imagine it swings the price that much in the end. Our value must be closer to the Clippers than the Bucks right now. At least that is how I look at it.
Seeing a picture of Dan Gilbert is the only possible buzzkill right now
it’s easy to see that LeBron won’t be here forever with his contract though. let’s say he stays 8 years. well, the new owner plans on having the team longer, no?
yes, elite players up the value. but, I think we fans tend to over-estimate their importance on it as the long-term financial constraints should outweight short-term runs for most sensible owners.
Thank you for reminding me…I wonder how many times we’ll see Dan during Cavaliers broadcasts? He sure disappeared from not only those but being seen at games the last four years. I’m hoping he’s learned and lets the team do all the talking. He’ll get plenty of credit especially if they accomplish winning it all.