LeBron James now owns a piece of one of England’s legendary soccer clubs. James has reached a deal with Fenway Sports Group (FSG), the majority owner of Liverpool FC, essentially merging his marketing company into FSG’s marketing arm and being paid a part of the club for doing so, according to the Wall Street Journal.
The deal between Mr. James and Fenway Sports Group will give Mr. James a minority stake in the soccer club Liverpool, which FSG owns. FSG, which also owns the Boston Red Sox, is partnering with Mr. James’s sports-marketing firm, LRMR Branding & Marketing to become the exclusive world-wide representative for Mr. James. The deal marks the first time that a professional athlete at the top of his game has taken an ownership interest in a team with the size and reach of Liverpool, which is one of the most popular and powerful sports franchises in the world
Right now there are a handful of very conflicted Liverpool fans in Cleveland.
While Manchester United is the biggest international name out of English soccer, Liverpool is right there in the second tier with Chelsea and Arsenal. Liverpool is a powerful brand name and the English Premiere League is an international brand of its own, maybe the most popular soccer league world wide (even if the German Bundesliga has the best soccer right now). That makes this a smart investment move by James in his quest to be a global business icon.
Liverpool has not done quite that well in the standings as they are currently a disappointing sixth (Liverpool fans have Lakers fans level expectations, so you can imagine how well sixth is sitting with them). Liverpool isn’t making a late charge up the standings with Daniel Agger and Glen Johnson out for the rest of the season. Liverpool finished seventh last season, so there is a pressure to turn things around.
The reaction to this move among the working class Liverpool faithful could be interesting.
FSG also owns the Boston Red Sox, but they are not directly involved in this deal. FSG and principal John Henry just bought Liverpool last October for $488 million (from Tom Hicks, former owner of the Texas Rangers). Part of FSG is Fenway Sports Management, which has sold advertising marketed venues before but LeBron becomes its first person as a client.
Tristan Thompson is a man without a contract. By not signing the qualifying offer with the Cleveland Cavaliers he put himself in limbo, the rare NBA holdout. Right now his options are to sign the deal on the table (the Cavs still have the five-year, $80 million offer out there), get the Sixers or Blazers to offer him a max contract (which neither team has shown any interest in doing), or hold out and hope the Cavaliers make a better offer. If he holds out for the entire season he becomes a restricted free agent again next summer — exactly like he is right now.
Without signing the qualifying offer and the threat of leaving, Thompson hurt his leverage.
But he has a little leverage. He and his agent Rich Paul had one other card, and it got played Saturday.
LeBron James and Thompson share an agent in Paul. LeBron has largely remained silent through this process but if he wants something in the Cleveland organization, he usually gets it. And he wants Thompson back at practices.
LeBron’s leverage is going to be put to the test. The Cavaliers have let it leak they are not that concerned about LeBron leaving them next summer over this — and they’re right. The damage to LeBron’s brand if he broke the hearts of Cleveland fans again would be crushing, unless he leaves for a very good reason. Overpaying Thompson is not that reason.
However, LeBron’s comment could push the Cavaliers to try to find a compromise.
For the Cavaliers, a lot of how they view all this comes down to their tax bill. The Cavaliers already have $94.9 million in guaranteed salary on the books, putting them $10.2 million over the luxury tax line, at a cost of more than $16.25 million. What this means if (or when) they sign Thompson is his first $10 million in salary would cost them $28.75 million in tax and every dollar above that for the next $5 million costs them $3.75-to-$1. Look at it this way, by my count $14 million this year to Thompson would cost $43.75 million in tax — the total for Thompson at that price is $58 million. While that’s not all on Thompson it’s a lot of cash, and Thompson wants a max deal that starts at more than $16 million a year.
Owner Dan Gilbert is already going to pay the highest tax bill in the NBA this season, but if he balks at those figures it’s hard to blame him.
Mario Hezonja, the No. 5 pick in this year’s draft, has never lacked for confidence. The Croatian guard made his pro debut in the Magic’s preseason game against the Hornets on Saturday and did this:
Between Hezonja, Elfrid Payton, Victor Oladipo and Aaron Gordon, the Magic have a nucleus of young players that has the potential to be a lot of fun. Even if they’re still a few years away from contending, they’re definitely going to be a League Pass favorite this year.