NBA Playoffs

Collin Hodson

Mr. Reuter

Economics

5 May 2014

NBA Teams Effect on the Economy

With the NBA playoffs in full force and the incredible first round finally coming to a conclusion after multiple game sevens it is an exciting time to be a basketball fan. These 8 teams remaining have seen fan bases bolster as they continue their incredible runs so far. What effect if any however does the economy see in these cities hosting playoff games. It all depends on three things that include the players on the team, the rarity that the team is where they are at, and what the matchups are.

A lot of people go to NBA games to see the best players play and if you are lucky enough to be in certain cities you can see the best. A specific city is Miami. Miami holds arguably the best player in the world. His name is Lebron James. He has become so popular and famous on the national scene that it is incredibly rare for someone not to know who he is. How has his magnificent performances and skyrocketing popularity helped the city of Miami? According to www.examiner.comthe Miami Heat as a team has pumped 1.4 billion dollars into the city of Miami and provided 21,000 new jobs for the city since the Lebron and the rest of the big 3 were formed. It is hard to argue with the positive externalities that are being seen in the city of Miami right now as the Heat continue their run for their third consecutive NBA title. The impact of a player even not as popular as Lebron can still be substantial. Cities like Oklahoma City with Kevin Durant and even Portland with the rise of Lamarcus Aldridge are continuing to see big positive impacts in their cities economy. The marginal cost of purchasing tickets and being able to see the best players every time these teams play at home will continue to help these economies grow especially around playoff time.

Not only are players important but another impactful part of a team helping a cities economy especially during the playoffs is the rarity of a team being there. For example the Portland Trail Blazers have been in the playoffs before but not many times in the past have they been able to be competitive or even make it out of the first round. Thanks to Damian Lillard and company that changed this year as they made it through the first round and are getting prepared to take on the number one seed San Antonio. The fan base of this team has really rallied behind them and even though the cost of playoff tickets are expensive the success of the team has influenced the fans to find the price of tickets more elastic than ever before. According to espn.com the Trail Blazers had a total attendance of 676,384 in 2012 but then in 2014 they had an attendance of 809,612. That is a pretty large increase that has been seen with this team and shows that people are more willing to come out and support their hometown team.

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Finally another factor on the economy but not really on the city level is TV ratings. The first round of the NBA playoffs have seen incredible viewing numbers thanks to the excitement of multiple overtime games and teams being pushed to the wire when they shouldn’t have been. TNT and NBA TV have seen incredible increases in their viewing since the playoffs have started. According to awfulannouncing.com NBA TV has seen an increase of 237% in their viewers in comparison to last years playoffs. People are watching these games because they have been more competitive than ever before and it is worth the opportunity cost to spend a night watching the NBA playoffs. It has been incredible to see how popular the NBA has been over the past few weeks with the playoffs in full force.

The NBA has not always been the most profitable business when it comes to the 4 major sports but seeing the impact that this years playoffs has had is very promising for the future. Having a NBA team is an important part to a lot of cities economy and hopefully the popularity of these teams continues to grow.