LeBron James Increases Cavaliers' Valuation to Over $1 Billion

Mike Chiari@mikechiariFeatured ColumnistJuly 12, 2014

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LeBron James' decision to return to the Cleveland Cavaliers will be a lucrative one for him, but the true beneficiary will be the Cavs franchise from a monetary perspective.

James announced Friday via a Sports Illustrated feature with Lee Jenkins that he was leaving the Miami Heat and "coming home." LeBron and Cavaliers fans seem thrilled by the situation; however, Cavs owner Dan Gilbert may trump them all.

According to Scott Soshnick of Bloomberg, LeBron's return to Cleveland means the Cavaliers are now worth more than $1 billion, which is nearly double what they were worth without James in the fold.

LeBron will have an impact on everything from ticket sales to merchandise sales, which makes him an incredible asset for the organization, per Soshnick.

Soshnick also notes, "Last season, the Cavaliers made one appearance on ESPN and one on TNT. The Heat were on ABC six times, ESPN 10 times and TNT nine times. Add NBA TV, and the Heat made the maximum 35 national TV appearances." Former chief marketing officer for the Cavs Chad Estis believes James will make the Cavs "must-see programming," per Soshnick.

"Certainly the brand itself, as well as the revenue that the team is able to generate, is much stronger with himโ€”to the point of a billion-dollar franchise," Christie & Associates LLCย managing director of venture capitalย Peter Schwartz said.

It didn't take long for James' financial impact to be felt, as the Cavaliers sold out their season tickets within hours of LeBron's announcement, according to SportsCenter:

In fact, nobody is more cognizant of James' worth than he is. Per Forbes, LeBron views himself as an entity:

As the Cavs can already attest to, there is no denying that. The four years since James' departure have been rough for the franchise, as it hasn't been winning a lot and has run through plenty of head coaches and front office personnel.

LeBron gives the Cavaliers stability as well as an opportunity to win whenever he sets foot on the court. Winning leads to money, and there is absolutely no question that James will lead to winning in the very near future.

As great as this is for the Cavs, LeBron's choice is likely to have the opposite effect on the Heat. That franchise became one of the NBA's best over the past four years, but James' decision to leave is a demoralizing one.

The respective futures of two franchises were hanging in the balance, and LeBron ultimately decided that he owed his services to the city of Cleveland. It may not be as glamorous as the beaches of Miami, but King James' newest reign with the Cavaliers promises to be a prosperous one.

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