NBA economics: The Cavaliers effect

Darren D'Altorio

Northeast Ohio, once again, can be proud of the Cleveland Cavaliers.

The Cavs’ win Monday night against the Indiana Pacers clinched the team’s undisputed position as the No. 1 team in the land for the regular season. It also secured home-court advantage for the Cavs in the playoffs.

Home-court advantage is a perceived competitive advantage in the sporting world. This is a known fact. According to, NBA teams with home-court advantage in the playoffs won the series 77.2 percent of the time. This is good news for the Cavs, a team with a nearly unblemished home record: 39-1.

Something not so statistically sound, however, is the economic impact, either good or bad, of a competitive professional sports team for the region. This raises an important question: Does the Cavs’ home-court advantage and overall successes secure an economic competitive advantage for Cleveland?

Economically, Cleveland is not a happy city. But when it comes to sports, Cleveland fans are as happy and loyal as they come.

Northeast Ohio fans go hard when it comes to supporting the local teams. Along with packing the stadiums, fans pack bars and living rooms, ordering up burgers, beers and pizzas. Think about all the money circulating on game nights. Based on boosted-game night sales, the local pizza shop can have enough money in the bank to order the next week’s supply of cheese and flour. The server in the local tavern can make his or her rent payment based on a good night of tips. The retail clothing stores can boost revenues with Cavs merchandise sales.

These are just some regional effects. More directly, think about the impact for downtown Cleveland. Downtown is swarming with fans on game nights. It’s an electric atmosphere. Not only is the “Q” sold out; there isn’t an empty seat in any restaurant or tavern with a television broadcasting the game throughout the city. The jobs created and sustained by this atmosphere, from suite server to janitor, exude positivism.

Sure, the perceived positive effects on the local economy seem to jump like LeBron when he loads that spring in his left ankle that sends him flying to the rim. Now couple that with an extended playoff season and home-court advantage. If any series involving the Cavs goes to game seven, it’s happening in Cleveland. That is one extra day to milk the economic teat. This news is all good. Right?


As always, there are naysayers. There is a debate raging between city officials who see and believe in the intrinsic economic value of a title-contending sports team, and economists who claim the value of a professional sports team is overstated and marginal at best.

Audrey B. Davidson, chairwoman and associate professor of the department of economics in the College of Business and Public Administration at the University of Louisville, wrote team owners are the ones who benefit from a team’s success while the city’s economy suffers at its expense in a 2001 article titled “Benefits of pro sports on economy often overstated.”

She reasons that city officials’ visions are whimsical when it comes to the value associated with a professional franchise, citing boosted morale and pride as plausible reasons to invest taxpayer money in a team.

“Every dollar spent on the stadium and attending an NBA game is a dollar less that is spent on some other activity in the community,” Davidson wrote. “Therefore . no net benefits are generated.”

On the contrary, Jeffrey Zaslow of the Wall Street Journal wrote that sports do have the power to mend a city’s soul, pointing to pivotal moments in history where a team’s performance rallied the city in light of plagued times.

For example, the “Steel Curtain” Pittsburgh Steelers of the 1970s, who won four Super Bowls, generated hope in the midst of the steel industry’s collapse. Then there were the 2001 Yankees, who went to the World Series mere months after the Sept. 11 attacks, providing a glimmer of hope after a devastating loss. Even the New Orleans Saints marched onto the field immediately after Hurricane Katrina ravaged the region. The game was away, but fans looked to the team for something to cheer about, something to provide happiness.

In times when people should have been crawling into a dark closet and crying, they showed up for the game, keeping the economic gears of the city turning by dedicating some income to the altruistic nature of professional sports.

The Cavaliers winning an NBA championship will not cure the housing crisis sweeping Northeast Ohio or regenerate jobs like an amphibious limb. What it will do is realize the growth potential and appeal for Cleveland.

The playoffs take place in summertime. Cleveland is on a lake. Cleveland has amazing amphitheaters and playhouses. Cleveland is home to the Rock and Roll Hall of Fame, an entity that generates $107 million in annual revenue.

The NBA playoffs can magnetize Cleveland into a national hotspot, a destination, a buzz-worthy city. People will visit, catch a game, grab a bite to eat, take a boat ride and maybe even fit in a concert. Marketing Cleveland on these premises sets it up for growth and economic success.

This is the power of the Cavaliers. This is their value. All for one and one for all.

Darren D’Altorio is a senior magazine journalism major and columnist for the Daily Kent Stater. Contact him at [email protected].