NBA Finals Cause Major Economic Impact On Host Cities

by Cheria BrickhouseJune 6, 2018

Evidence Shows that Hosting the NBA Finals May Impact a City’s Economy

For the fourth straight year the NBA champions will reside in either Cleveland or the San Francisco Bay area, as the Cavaliers and Warriors prepare to square off in the latest edition of their epic quadrilogy. The three previous NBA Finals matchups between these teams has produced some incredible moments, burnished the legacies of multiple players, and invigorated a pair of fan bases in a truly special and unique way.

While here at Homes.com we love the action on the court every June, our minds can’t help but wander a bit to the cities playing host to these games. The Bay Area and Cleveland have been showcased on a global level for four straight years now, becoming media hubs for one of the most-watched sporting events on earth for several weeks each summer. As home industry experts, we couldn’t help but wonder what such a spotlight would do to the housing markets and economies in general for both cities.

Once we started digging into the data the results were so interesting we decided to expand our view to include every series over the last decade, giving us a more complete view of the local economies in cities that host the NBA Finals. While there are obviously many different factors beyond hosting the Finals that majorly influence a city’s economic success, we zeroed in on four specific metrics that we felt could be most directly impacted, at least partially, by the NBA Finals. We also researched the same metrics for the United States as a whole to compare it to the Finals host cities. The results of our research are below.

Chart shows the effect of the NBA Finals on a city's employment.

One thing a successful basketball team does is create jobs. Good teams draw big crowds, meaning a larger workforce is needed to run things at the stadium, including jobs for ushers, ticket salespeople, and concession workers. Beyond the arena itself, increased crowds require more workers at parking garages, restaurants, and shops near an arena in order to handle the demand created by the increase in foot traffic.

We found data on employment rates in Finals host cities released by the National Labor Board for every year included in our study, and then compared the data for the year they were in the Finals to the year before that appearance. Our analysis found that in nine of the ten years we examined, at least one of the cities hosting the Finals saw better changes in employment than the national average, with the city the NBA Champions called home doing it six times and the runner-up city pulling it off five times. Interestingly, only twice did both Finals host cities do better than the national average in the same year.

Bar chart shows changes in cities' population after hosting the NBA Finals.

The healthy job markets that come with an increase in employment opportunities associated with a successful NBA team draws outsiders to a city looking to fill those jobs, increasing the population of that city. Once again, cities with teams in the NBA Finals more often than not performed better than the United States as a whole. Three times, both cities participating in the Finals grew at a faster rate than the rest of the country, with the winning team doing so five times total and, interestingly, the city with the Finals loser did so six times overall, proving that sometimes just getting close to the ultimate prize is enough to produce positive improvement.

Graph showing the effect of the NBA Finals on a city's average home price.

As home-sale experts, we were particularly interested in taking a look at what effect droves of people moving to these basketball-mad cities to live and work has on average home prices. In seventy percent of the years we evaluated the winning team city outpaced the national average in terms of home price increases, with the team that lost the Finals doing so four times.

In an unexpected twist, we found that a city’s population increasing faster than their opponent city didn’t necessarily mean the same would hold true of home prices. In fact, it was a fifty-fifty split with Finals winners outperforming losers in this metric half the time and vice versa.

Gross domestic product changes from previous year to Finals year.

Finally, we took a look at gross domestic product (GDP) to get a greater sense of the economic growth of these cities as well as America as a whole. Using census data on GDP, we were able to chart these competitors using a metric that gives us a more complete sense of these economies overall.

In all but two years over the last decade either the Finals winner or loser outperformed the national average when it came to year-over-year GDP growth, and three times both did it in the same year. Much like population growth, the losing team outperformed the national average more than the winners, six years to five.

Taken as a whole, this study showed that cities with some of the best teams in the NBA have found success and growth in a number of economic areas, frequently doing better in those areas than the country as a whole. Both the champions and the runner-ups had years and metrics where they surpassed the national average, making it seem likely that success on the court has a least some relationship to civic success. For cities throughout the country looking for increased growth, it might be time to get practicing on the hardwood!

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About The Author
Cheria Brickhouse
Cheria is an aspiring homeowner and the Content Marketing Coordinator for Homes.com. When she isn't working, she stays busy sewing, designing, and diving into all sorts of DIY projects.

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