Report: LeBron James could have made more money long term, but opted for more security


Our own Dan Feldman broke this all down before LeBron James even signed his latest, massive contract — he had some short vs. long term decisions to make.

He could sign another one-year deal and sacrificed a little money in the short term for likely more money long term (remember, the new Collective Bargaining Agreement is being negotiated and the landscape could shift), or he could go with a multi-year deal and sacrifice a little long term for security.

LeBron chose security — three years at $100 million, becoming only the third NBA player ever to make more than $30 million in a season. But he could have made more. The fantastic Danny Leroux broke it down at The Sporting News.

The decision cost James some money in the future. Had he signed a one-year deal with an option for a second year, as he did in his first two seasons back with the Cavaliers, James finally could have landed a full maximum five-year contract next offseason, assuming the Over-36 Rule is changed. (He would have sacrificed about $3.4 million this season, though.) That hypothetical 2017 deal would have come as the salary cap leapt from $94 million to $102 million, meaning he would have made more money for 2017-18 and 2018-19. Alas, he went with security and avoided having to continue to play these annual option games.

The money still is unprecedented, after all. The far more interesting implications of James’ decision come in the uncertainty of the future. The NBA and its players already have begun discussions on a new collective bargaining agreement that will take effect next summer. Part of those discussions likely will be the existence and limits of maximum contracts.

Some people hate to hear this — because you and I are never going to make $30 million in a year (likely not our lifetimes) — but LeBron is underpaid. Based on what other teams have said off the record about other superstars, he likely generates more than $70 million in revenue annually for the Cavaliers between ticket sales, sponsor deals, and everything else — and that’s not counting the boost in franchise value. LeBron drives revenue, but because of the max salary rules in the NBA he can only make so much (which benefits the Tristan Thompsons and J.R. Smiths of the world, who have value on the court but don’t generate the same revenue).

There has been talk of changing those max salary restrictions — if LeBron (or Kevin Durant, Stephen Curry, and all the other obvious max guys in the NBA) can make more money but the salary cap doesn’t change, it becomes much harder to form “superteams.” It’s something some owners support. It is possible under the new CBA LeBron could make more. But even if that happens (far from a sure thing) he will be a free agent in 2018, when he will still be a max player and can cash in.

All of which is to say, LeBron is a smart man about business and knew his options. He made his call. And I don’t think he’s hurting financially.