It's good to be the king. And right now, nobody in the NBA is better than LeBron James. The Cavs forward has made it to five straight conference finals, and barring a miracle performance from the Atlanta Hawks, we'll likely see LeBron James in the NBA Finals for the fifth year in a row.
Part of LeBron's legacy will be his business acumen. Criticize "The Decision" all you want, the man has made some terrific business choices throughout his career. We've already written about how he's earned $500 million throughout his career, and how his recent small contract with the Cavs was actually a genius move. And with Michael Jordan becoming the first billionaire baller last year, it's certainly not out of line to ask if LeBron, who will turn 30 in December, could also reach billionaire status.
Let's start in the present day. LeBron is worth $270 million right now, or just over a quarter of a billion dollars. That's still a long way to go. But even though his shooting percentage has dipped this season, he's still performing at an elite level, and you know the Cavs will offer him a max contract, either this year, or after his player option at the end of the 2015-16 season.
LeBron is slated to earn another $22 million next season; after that, the Cavs could sign him to a maximum of a five-year deal for 35% of whatever the salary cap ends up becoming, because LeBron has been in the league for 10 or more years. That cap will balloon thanks to the television deal the league signed, worth an estimated $24 billion over nine years. While no official number has been locked in place, most experts agree it'll fall around $90 million. For the sake of keeping the math relatively easy, let's say $90 million is the new cap at the start of the 2016-17 season. If LeBron signs a five-year deal to stay in Cleveland, he'd earn $31.5 million in his first year, and would be eligible for 7.5% raises every year, thanks to his Bird Rights. All told, he could sign a max deal of five years for about $183 million.
After that max deal, LeBron would be 35 years old, with seventeen seasons on his NBA odometer. At that point, he'd be on the decline in his career, and it's doubtful anyone would sign him to a max deal (or if they did, it would only be for two or three years, tops). Hypothetically, let's say the Cavs want to keep LeBron in a mentor role, with the occasional request for a 30 point, 12 rebound, 14 assist kind of night, and they offer LeBron a three-year, $75 million contract–about 25% of the salary cap. That's a grand total of $280 million LeBron will make over the next nine years. By then, he'll be 38 and have played 20 seasons in the NBA. It's hard to think he'd play much longer than that.
Now, $280 million is a ton of money, but that's only a small percentage of what LeBron will be raking in. Consider his final season in Miami, the 2013-14 campaign: LeBron's salary was $19.1 million, but he made $53 million off the court. His endorsement income has either stayed the same or risen every year he's been in the league, so let's conservatively say he's making $60 million off the court for the rest of his career. That's $540 million by the time he finally clears out his locker, just from off the court endorsements and investments. Put the on court and off court numbers together, and LeBron will have made $820 million. Add that to his already $270 million in net worth, and boom! LeBron is a billionaire before age 40.
Oh, but wait. Despite being a great basketball player, LeBron isn't safe from taxes. The IRS has to grab its share, which we can assume will be about half of the total. So instead of being worth over a billion dollars by retirement, LeBron will instead have a modest $680 million to his name.
But as Michael Jordan has proven by making $100 million per year from Nike, even at age 52, retiring from the sport doesn't mean you have to stop earning. It's unlikely to think that companies will stop asking LeBron to endorse things, even if he's not lighting it up on the court.
We'll get to some more endorsements momentarily, but first, think back to Game 4 of the Eastern Conference Semis. Remember when current Cavs coach Dave Blatt told LeBron he would be inbounding the ball with 1.5 seconds left in a tie game? And LeBron immediately said afterwards that he scratched the play, calling his own number before hitting the game winning shot? That kind of "player as coach" is hardly a rarity in the NBA, and it's probably not the first time it's happened between LeBron and his coach, whether said coach was Blatt, Erik Spoelstra, or Mike Brown.
That sense of what works and what doesn't would serve well in a coaching aspect. Prior to a few years ago, it'd seem absurd to think LeBron could earn a coaching gig as soon as he retired. But Jason Kidd, Derek Fisher and Steve Kerr have shown that you don't really need any coaching experience at all to move from player (or in Kerr's case, GM and broadcaster) right into the coach's chair. Kerr and Fisher both signed contracts worth five years and $25 million, though Fisher's had a few lines of fine print; with the way the Knicks are playing, he probably won't see that full $25 million.
Though Fisher and Kerr have an absurd amount of rings between them, neither player was anywhere near as good as LeBron is on the court, so it's safe to think he'd also earn somewhere around $25 million over five years. Not all former players turn out to be great coaches, but if LeBron wanted to take that route, it'd add a little more money to his bank account.
The biggest endorsement of all is LeBron's shoes, though. He earns about $20 million a year with Nike currently, including royalties. We've factored that into the endorsements during his playing days, but assume, like Jordan, that shoe sales continue to climb after retirement. We'll say he earns $30 million from his shoes, and $20 million from other endorsement deals. LeBron would have to keep that $50 million a year pace ($25 million per year after taxes) for 13 years to finally break over the billion mark–slightly less time if he coaches.
That means LeBron James would be a billionaire at age 51 in the year 2035. The exact same age when Jordan hit the billion dollar status. Spooky.
Obviously, this is all just hypothetical at this point. So many things can still happen between now and the time LeBron turns 51. But there's a real possibility he can reach billionaire status someday. And with the way he's dominated on the court over the past several seasons, it's tough to think he won't get there.