There's no doubt that LeBron James is one of the best basketball players to ever take the court. But what's often overlooked, is that he's a shrewd negotiator, too. And those business skills have helped him earn a ton of extra money already, with a lot more to come.
We've talked about how LeBron has structured his contracts since returning to the Cavs. To quickly recap: rather than signing a long-term deal, he's signed short two-year contracts with a player option for the second year. He's not doing this to hold Cleveland captive, but to maximize his earnings. Max players can earn up to 35% of the current NBA salary cap. And with a new TV deal about to kick in, the salary cap will soon skyrocket. It's already increased quite a bit over the past few years. By essentially re-signing a new deal every year, LeBron has milked some extra money out of his owner's pockets.
Consider this: he could have signed a max contract, a four-year, $88 million deal in 2014, his first year back in Cleveland. That contract would also have come with 4.5% annual raises. Rather than doing that, he signed his "one-year" contract, opting out before the second year to restructure the deal. He'll likely opt out again after this off-season.
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There's more incentive for LeBron to wait one additional year before going for a long-term deal. He'll reach "Full Bird Rights" status in 2017, which means he can sign a five-year max contract with 7.5% annual raises. And, as the ever-increasing salary cap continues to explode, 35% of it looks even more appealing.
So how much extra money can LeBron make? According to Business Insider, by waiting until 2017 to sign a long-term deal, he'd earn nearly twice as much than if he signed that contract back in 2014. A four-year deal two years ago would put LeBron's potential career earnings at $214.2 million by the time the contract was up. If he waits until 2017 to sign a five-year contract, he's projected to accrue $414.1 million in career earnings when that deal ends in 2022. Even signing a long-term deal this upcoming off-season would score LeBron a cool $95 million in additional earnings by the time it expires.
LeBron's signing these two mini deals has proven to be fairly rare – most players in the league have taken the longer, more secure contracts when they've presented themselves, rather than trying to hold out for more money. Granted, LeBron is a freak of nature who rarely misses a game, so it's a bit easier for him to bet on himself. But he's 31, with nearly 38,000 minutes played under his belt. Will the durability be there for much longer? Â
It'll be interesting to see when LeBron finally signs a long-term max deal. Either way, while his career earnings continuing to balloon, LeBron is well on his way to billionaire status.
