While LeBron James was still deciding where to take his talents, a fun bar stool/message board discussion was how much would LeBron be offered in a non-capped open market? $30 million a year? $40 million?
But the market is capped, and LeBron will start making $14.5 million this season. Which is a real bargain, according to what Ian Thompson of Sports Illustrated was told.
“I’m projecting for next year he’ll be worth $31 million,” said Rich Steinlauf, a New York-based analyst who has been studying the NBA for three decades.
Steinlauf’s system looks at the impact of a player to determine a worth based on his share of a standard team payroll. Which leads to an interesting conclusion.
Miami’s off-season coup of signing James, Wade and Chris Bosh has given the Heat the league’s most cost-efficient payroll, according to Steinlauf. While some will question the $18.3 million average salary Bosh will earn over the next six years, Steinlauf insists that the Heat are paying him what he’s worth.
Steinlauf is right. I don’t love his system, but he is right about the finances.
Since the dawn of professional sports in America, it is largely the stars that sell the team and make the money. That is particularly true in basketball. The money that a LeBron James or Kobe Bryant or Dirk Nowitzki generate in ticket sales (and with that concessions and parking), in uniform sales, the boost they provide in marketing far outweigh what they are paid. Put simply, LeBron is going to bring in a lot more money to the Heat than what he gets in salary.
Where that table turns is the mid-level guys. While Kobe is generating the income in Los Angeles, Lamar Odom and Luke Walton and even Andrew Bynum are the beneficiaries, not really generating what they make. It’s that way on every team. Really, in every sport.
If you want to make the argument that they are all overpaid because they are playing a sport for a living and we should be paying teachers and firefighters more, then go ahead. But that is a cultural argument about the value of entertainment in our culture and our economic structure. Our top entertainers make a lot of money, but they generate a lot of money and we live in a capitalistic society where you (basically) get paid for what you generate. Fair or not, just or not, that is the reality.
So yes, LeBron James is underpaid.