“LeBron James Effect” on Ticket and Merchandise Sales

Lakers

LeBron James’ arrival in Los Angeles has already begun paying dividends for the Lakers; according to the team, merchandise sales are up 100% YoY through the team’s first 2 home preseason games. While the “LeBron James effect” (the NBA version of the Tiger Woods effect) has helped the Lakers to sell fan gear, it’s yet to impact primary market ticket or sponsorship sales; by the time James signed to play in Tinsel Town on July 9th, little sales work remained for the ’18-’19 season. James has made his mark on the secondary ticket market, the average price to see a Lakers home game this year is up +427 YoY (StubHub); the “LeBron James effect” has had the opposite impact on Cleveland, where his former franchise has seen season ticket sales plummet.

Howie Long-Short: James will certainly have an impact on ’19-’20 primary ticket sales, the club has already stated its intention of increasing ticket prices at Staples Center next year. The question is how much will the price rise? The team is said to be using StubHub to determine the intrinsic value of their tickets and claims demand is so great they could sell out a building with 31,000 seats, 10,000 more than Staples Center has.

One way to play the LeBron James effect is via the NBA’s exclusive licensing and manufacturing partner, Fanatics. e-Commerce has exploded from 1% of all licensed pro league merchandise sales to 20% within the last decade and according to NBA commissioner Adam Silver the company “owns the marketplace” (they are expected to do $2.3 billion in ’18 sales and founder Michael Rubin believes that figure could eventually reach $10 billion). Fanatics isn’t public, but Softbank (SFTBY) and Alibaba (BABA) are investors.

Fan Marino: The NBA season gets started next Tuesday night (October 16th) with 2 games (Philadelphia at Boston and Oklahoma City at Golden State), the Lakers open on the road (on 10.18) at Portland. According to StubHub, their home opener against Houston (on 10.20) has the highest average ticket price ($934) of any NBA game this season.

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Author: John Wall Street

At the intersection of sports & finance.

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