The LeBron effect: $3 billion more for the Chicago area?

An economist with the University of Illinois at Chicago said Tuesday that basketball star LeBron James could boost the Chicago-area economy by roughly $3 billion if he joined the Chicago Bulls.

John W. Skorburg, of Wheaton, said that the so-called "LeBron effect" would be similar to the "Michael Jordan effect," both winning athletes with star appeal that attract both local and out-of-town fans. Those fans will spend money on tickets, food, merchandise, hotels, car rentals and more, which helps local restaurants, hotels and other industries hurting from the recession.

"It's all predicated on additional playoff games, if they run deep into the playoffs," said Skorburg.

The $3 billion estimate is based on James signing a six-year contract and what's spent in and around the United Center during 10 playoff games. It also considers how fans celebrate further in area bars, restaurants or even at home parties with delivered or catered food.

James, who becomes a free agent after a winning run with Cleveland, has been the focus of attention by some major NBA teams, including the Bulls. But suburban financial experts said everything depends on what James decides, if he stays in Ohio or follows the money and glamour to Chicago.

Some of those economists also said that such calculations of economic gains are difficult to forecast reliably.

Signing a major athlete would undoubtedly boost local sales in the region, but it would be more of a win for local pride and global branding for the city, said Irving Rein, communications professor at Northwestern University in Evanston and author of the book, "The Elusive Fan: Reinventing Sports in a Crowded Marketplace."

"A lot more of the money would be going to the Bulls and to the NBA than anyone else," Rein said.

Such projections are hard to predict and measure, agreed Tom Rowen, director of Institutional Portfolio Management at Fifth Third Bank in Chicago.

"The greatest economic impact for Chicago will ultimately come from the resurgence in construction, key industries and general employment," Rowen said.

The May unemployment rate for the Chicago area was 10.3 percent, and though the economy is improving, economists say it will be a slow process of recovery. James is a great athlete, but he could not be expected to boost our economic condition by himself, said Rowen.

Various economists and pundits try to estimate the impact of big-name individuals and events through the use of multipliers and other statistical analysis, but these calculations are misleading at best, said Brian L. Gaspardo, managing partner of O'Neill & Gaspardo LLC in Mokena and Oak Brook.

"Whether it is LeBron, the Olympics or the Super Bowl, the economic impact is only for new economic activity flowing into the city," said Gaspardo.

The economic term is displacement, how much economic activity is displaced from somewhere else and relocated to Chicago, Gaspardo said.

"So the family in Hinsdale who goes to a Bulls game instead of to dinner doesn't count. But the family from St. Louis, who drives in to see LeBron does," Gaspardo said. "And the playoff or regular-season game the Bulls would have sold out anyway, doesn't count. But the trip to the Finals that wouldn't have happened otherwise, does."

Sports is a business like anything else, and if James stays true to form, then he could do very well for the Bulls and the local economy. But some other highly paid, well-known athletes have suddenly flamed out, said David Klein, senior vice president/financial consultant for RBC Wealth Management in Vernon Hills.

"Still, James is a good business risk," Klein said.