LeBron James is worth hundreds of millions to the Cavs and Cleveland

CLEVELAND -- Six hours before tipoff of Game 3, Keisha Bagwell is waiting in line to pay for her new Cavaliers gear with her three sons in tow.

The damage? Three LeBron James jerseys -- one for each of them -- $240.

"I'm not mad at him if he leaves," Bagwell says. "He came back here, won a title and did all he could do."

Considering that James played in two more games in that jersey, and might never play in it again, it might be a risky investment.

Bagwell wasn't alone.

Twenty-five percent of all merchandise purchased from the store on Wednesday, when Game 3 was played, had good old No. 23 on it, according to the Cleveland Cavaliers.

James is the most valuable free agent in the history of sports. When he took his talents to Miami and left Cleveland in the summer of 2010, the franchise value, according to Forbes, dropped from $476 million to $355 million in a single year. If James left this time around, and a 25 percent drop happened again, the loss at current Forbes values would be more than $300 million.

To understand how important LeBron is to Cleveland, one first has to understand that he helped build the modern-day version of the city -- or at least the immediate downtown surrounding Quicken Loans Arena.

What downtown Cleveland looks like is very different from what it looked like when LeBron was drafted in 2003. The city's well-known chefs, including Jonathon Sawyer, Michael Symon and Rocco Whalen, made their moves. New bar life surrounded their establishments.

"In the first seven years LeBron was here, he gave business people the confidence to double down and invest," said Joe Roman, president and CEO of the Greater Cleveland Partnership, the Chamber of Commerce governed by more than 70 CEOs in Northeast Ohio that sit on its board. "It changed the energy behind the decision-making process."

The Greater Cleveland Partnership has never attempted to put a number on LeBron's true value to the community, but Roman says confidently that it's in the "hundreds of millions of dollars."

Without LeBron, Roman said, the projections for business on a $465 million convention center that was dreamed up before he left for Miami and opened in 2013 might not have been robust.

"Companies have all of a sudden said, 'Cleveland is a cool place to be; I've never been there before,'" Roman said.

An executive for Experient, a conference management company, told Crain's Cleveland Business in March that Cleveland, which hosted the 2016 Republican National Convention, has been a top-30 booking venue for its conferences over the past two years, after having never been in the top 50 before.

While James has been valuable, what makes him more valuable to Cleveland is there's so much more to go, meaning that having LeBron is just as important as it was before.

In May, Forbes considered the nation's populous cities in terms of job growth. Cleveland finished dead last. The state also had the third-largest increase of drug overdose deaths in 2017 (39 percent), according to the CDC.

Daniel Shoag, a professor of economics at Harvard and Case Western University, recently co-authored a paper that looked into whether LeBron's economic impact would be similar in any other city compared to Cleveland. Shoag looked at the businesses within a one-mile radius of the arena in Cleveland and the one in Miami when LeBron played there. Shoag found that LeBron's presence, and the effect he had on attendance, increased the business of eating and drinking establishments by 13 percent and employment by 24 percent in Cleveland. But in Miami, Shoag couldn't fairly attribute any new business or jobs to LeBron.

While parts of Cleveland have thrived, weathering thin times are always top of mind. When LeBron is in Cleveland, the downtown is bustling. When he's not, there's risk of it turning into old Cleveland.

"We bankroll 15 percent of what we make in the months from March to December to cover all the losses we have from January and February," said celebrity chef Sawyer, whose Greenhouse Tavern is on a 4th Street that James' presence contributed to revitalizing. "You don't do that, you don't know about the typical dip in business here, you can easily go out of business."

"The most valuable seats in Quicken Loans Arena were sold on a three-year minimum for 2019 through 2022, and there's no discount if LeBron isn't there."

"If we lose LeBron again, I think it will be more of a short-term impact," Roman said. "It wouldn't be like falling off a cliff because the foundation is so strong underneath."

What makes James' free agency so difficult for Cavaliers owner Dan Gilbert is that he has so much on the line but can only offer so much to convince him to stay. Aside from the team value that could plummet, so too could his other investments in Cleveland, most notably his investment in Jack Casino near the arena. The casino has pulled in $1.26 billion in revenue from May 2012 through 2017, according to the Ohio Casino Control Commission.

Gilbert has protected himself in some fashion. The most valuable seats in Quicken Loans Arena were sold on a three-year minimum for 2019 through 2022, and there's no discount if LeBron isn't there. Gilbert also used LeBron coming back to help finance a $140 million renovation, regardless of whether James is playing in town.

Meanwhile, Mark Klang of Amazing Tickets, one of the biggest ticket brokers in Cleveland, says he isn't concerned. He hasn't taken out any insurance for his business and says he isn't worried about a future decline.

"Where is LeBron going to go?" Klang said. "He wants to see his kids. He wants them to play at his high school. He's done being a ring-chaser. It's different this time. He's coming back."