JockStocks: The Financial Impact of the LeBron James Decision

LeBron is taking his game to Miami to team up with Chris Bosh and Dwyane Wade on the Heat, making the team an instant contender for the NBA title. The triumvirate of NBA talent will now ply its collective and individual talents and try and pry the title of center of the NBA universe away from Los Angeles.

Not only is this good news for Miami, but it's good news for Nike (NKE). Each of the new Three Amigos has a contract with Nike -- Bosh and James with Nike itself, Wade was once with Converse, but is now with the Jordan Brand. With all three of these players under the swoosh umbrella, NKE stands to make a rather sizable chunk of money. About the only merchandise aspect stemming from this trio that Nike will not profit from is officially licensed NBA merchandise (i.e. jerseys, t-shirts, etc.). Nike will make a ton of money off this group, especially if Miami makes it to the NBA Finals to face the Los Angeles Lakers (Kobe Bryant is under the Nike umbrella as well).

Some may think that ESPN/ABC stands to make a lot of money thanks to the King's move to Miami, as the TV market is much bigger than Cleveland, right? I mean advertisers will pay top dollar to get their ads aired during Miami Heat games because of the size of the Miami television market. While there is some validity to this reasoning (advertisers will pay more to get ads aired during Miami games, mainly because more viewers across the country will be watching), the Miami television market isn't a great deal bigger than Cleveland. In fact, the Miami market is only 18,000 televisions larger than the Cleveland market (ranked 17 and 18 respectively). There wil, however, be more money paid for ads because more people across the country will be watching the games.

Unfortunately, the largest financial impact will no doubt be felt in Cleveland -- as the city watches its NBA team fade back into mediocrity. Of course, the Cavaliers couldn't win a championship with LeBron James, so mediocrity is expected in a city that hasn't seen a championship in quite some time. There were jersey burnings in Cleveland, and LeBron now holds a place in the pantheon of hated Cleveland sports figures by John Elway and Earnest Byner.

While the citizens of Cleveland handled the LeBron James news as well as expected, Cavaliers Majority Owner Dan Gilbert issued a statement to the team's fans (ignore the fact that it is in Comic Sans, apparently this is the font Gilbert prefers). The sting of LeBron's decision is going to be felt in Cleveland for quite some time -- and I don't think that anything other than winning a championship without the King will lessen the pain. Unfortunately (no matter what Dan Gilbert says), it is going to take some time for the Cavs to win an NBA title.