It makes (dollars and) sense for James to pursue free agency … again and again


VIDEO: LeBron James’ top 10 playoff plays

HANG TIME NEW JERSEY — News broke Sunday afternoon that LeBron James has reportedly informed the Cleveland Cavaliers that he will opt out of the second year of the contract he signed last season.

This news was expected and doesn’t mean that James is leaving Cleveland again. All indications are that the best player in the world intends to re-sign with the Cavs. But even if he wants to stay with the wine and gold for the rest of his career, he’s probably going to become a free agent next summer and the summer after that, too. And it’s mostly about the money.

Free agency does give James some leverage. It keeps the pressure on Cavs management to do everything it can to give him the best supporting cast possible.

It also makes James a richer man.

James’ option for the 2015-16 season was for a little less than $21.6 million. A new contract this summer (for a player with at least 10 years in the league) could start at at maximum of about $22.0 million. (We’ll know the exact number when the 2015-16 salary cap is officially announced on or around July 8.) That’s not a huge raise (especially when you take income taxes into account), but it’s worth the paperwork.

James will have much more incentive to become a free agent in 2016 and 2017, when the salary cap is expected to make two big jumps, thanks to the new TV contract.

Assuming James signs another two-year, max deal with an option in the second year (a one-plus-one contract) again this summer, the ’16-17 option would be for about $23.0 million. But a new, max contract next summer could have a ’16-17 salary of more than $29 million.

That deal could have a second-year option (for ’17-18) of about $30.5 million. But a new, max contract in 2017 could have a starting salary of more than $35 million.

There’s another reason why James should want to be a free agent in 2017. That’s the year when the Cavs would have his Bird rights.

Bird rights are for free agents who have spent three years with a team (or are traded with Bird rights). Since James signed a new contract with the Cavs in 2014, he needs to spend two more years in Cleveland for the Cavs to have his Bird rights.

Why does that matter? Well, without Bird rights, a contract can only be for a maximum of four years, with raises of only 4.5 percent of the initial salary. With Bird rights, a contract can be for five years, with raises of 7.5 percent of the initial salary.

And the year that James, assuming he intends to play another six years in Cleveland, gets his Bird rights happens to coincide with the year when it would behoove him to finally sign a longer contract. After big jumps in 2016 and 2017, the salary cap is expected to go down in 2018. So the first year of a contract signed in 2018 would be less than the second year of a deal signed in 2017.

At 32 years old in 2017, James would be subject to the “Over-36” rule on a five-year contract, so a deal then would likely be for just four years. But with Bird rights, it could start (based on current salary cap projections) at more than $35 million (the highest salary in NBA history) and reach more than $43 million in ’20-21.

20150628_james_salaries_2

Of course, 2017 is also the year when the league or the player’s union could opt out of the current collective bargaining agreement. And a new CBA could change the parameters of contracts signed from then on. But as things stand, it makes financial sense for James go through free agency for four straight summers. This is just year No. 2 of that stretch.

42 Comments

  1. Eric Bennett says:

    is this a team player? No, LeBron is a whining Bitch, he does all the good things on court to look good, but he’s really in it for himself. Look at his play, if he’s not winning he pouts like a bitch, instead of giving % 100 percent, if LeBron would step on the floor and fight thru losing and give his all I would not care how much money he makes , but he doesn’t show effort.

  2. jake s. says:

    hahaha pun master

  3. KB says:

    #GREED. T
    The rich always look to get richer even if they will never spend it all. He makes about 44M a year just from endorsements.

  4. ill the Frenchy guy says:

    Come on guys!! No disrespect to Lebron who is surely a bright man. But don’t forget that at this level he can’t think alone but with his lawyers, financial advisers and so on! At the end of the day this is just a game… but also a business industry. You all probably heard about the quote: “He who has the Gold makes the rules”. WRONG! He WHO KNOWS THE RULES MAKES THE GOLD! That’s why when you start making big numbers as LBJ does you better be surrounded by good people, smart lawyers and financial advisers to keep it grow.

  5. OverseasNBAfan says:

    He is absolutely deserving of being the highest paid player in the NBA.
    Although think its funny people commenting, good on Lebron do it for yourself and whats best for your family take care of them.. fair enough that is what matters most in life for sure.
    However you’d think that just his first 5 years or so in the league LBJs family is setup and secure for their lifetimes and even their kids and grand-kids for generations. 100% that is not a family with financial security at the top of their worries list.

  6. Its A Business says:

    I don’t think Lebron will be worth that money down the road…still a smart move for him though considering he basically runs the Cavaliers.

  7. MacFarlane says:

    Lebron James, get your money. You are worth more than regular hard-working people. You can put a ball in a hole really well, and people get happy when you put that ball in the hole. You also sell shoes… You deserve more money than educators, social workers, military personell, etc. because of what you do. Wow our society is messed up. How many millions does a person need before they are set for life? Never enough.

    • jae porter says:

      The millions only go so far for athletes that have to deal with injury & strain on their bodies. It’s not his fault his dream job pays the way it does

  8. harriethehawk says:

    He has so much power he can command anything he wants and everyone bows down to him.

  9. johnny tc says:

    I think he b takin his talents back to soutbeech. Yep, i b spell it right. LJ is the reason why I watch the NBA! I love watching him get beat every year. He could have Michael, Magic, Larry and Kareem on his team and they’d loose. The play is always to get LJ an isolation. He is sooooo full of himself… Hey Dan, when he opts out, grow some balls and say ok and don’t sign him.

  10. John says:

    Everyone is talking about the money aspect, etc…but in reality. Having to opt out each year is actually quite risky….Older players are more prone to injuries, look at Kobe. If Lebron was to be injured in any of those years before signing a long term, it could actually set him back.

  11. jack says:

    To the guy saying tickets will rise. The cap stays they same for all the nba despite how much we pay lebron, the owners are still going to make a profit as they have made a profit before and the extra money is coming from the tv deal. It works on a percentage base 50/50 about for the players and owners so that is why his max is rising. The ticket prices are rising for the same reason the movie tickets have risen, bc they can and people are still paying I think it is ridiculous but to put this on the players/lebron is ridiculous

  12. dob says:

    FOR ALL of you saying ” good for you lebron, go get your money”. Keep that in mind when the ticket prices skyrocket to the point where only corporations and rich people will be able to attend games. At some point we have to ask, what are we doing here?

  13. t says:

    Thats crazy amount of money but he will never reach that 43m a year it would b stupid of the cavs he will be 36 he has a lot to prove to be worth that… Most will say he is worth that now but he clearly cant win without help so if hes getting that whats everyone else getting esp in the down slide of his carree…

  14. Tim win says:

    Wow Lebron james is truly an entrepreneur.
    That’s so exciting, this is a fascinating scenarios and I can wait to see it play out. At that current level of 7.5 percent increased every year. 46.55 million year 2021-2022.
    50 million year 2022-2023. That’s awesome, he’ll be making over 50 million in his prime. I believe Lebron is still developing and growing as a player and will become the most prolific player the game had seen in a long time. Comparable and maybe one day greater than the legendary Michael Jordan, Magic, Larry bird, jerry west, bill Russell , wilt chamberlain and Elgin Baylor, of all time. I would love for Lebron james to be a owner or partner with the cavs. They owe him, he save Cleveland and the nba finals. 6 straight nba finals. Wow see you next year in the finals.
    Nba finals – Lebron vs west coast !!
    Imagine Lebron had Ray Allen in the finals this year. Dwayne wade next year. It’s gonna be fun to watch!!!

  15. C Lee says:

    I’m not a huge lebron fan, but all of you saying talking smack cuz lbj losing in the finals would make bad GMs. whether or not he deserves more $$ than MJ are u saying u wouldn’t pay the guy?? GTFO!!

  16. Louie says:

    That is some impressive pay. I would say he is worth it. Even if he consistently loses in the Finals, with the Weak Eastern Conference he can expect to make the NBA Finals almost every year. Win or lose that is some big TV money!!

  17. KB says:

    Actually based on inflation MJ’s 33M in 1997, is worth $48.7M in todays money due to inflation. So LBJ will never eclipse that.

  18. robb says:

    for the big superstars, a time comes when they are eventually in position to have absolute control. it’s not good for the team

  19. Nikki Jackson says:

    James get your money. Do what you have to do for you and your family. This is a business and thats all. No matter what decision you make I support you. You need help and players who are willing to want the same thing. A championship……..,,

  20. sanjay says:

    he should be the last guy to be worried about money. endorsement galore, if he wins again. they will touch to the tune of 100 mil per annum excluding salary. to be the great of the greats you have to live a lot on the table. they did not get the proper bench see today they are paying the price! the ring was there for the taking, lebron and co blew it.

    you have to learn from arnold, who took no salary when he was governor of california for 8 years!

  21. kobefan2014 says:

    He deserves more money then mj? LOL. I’d definitely pay him that being 2/6 in the finals

  22. Curley says:

    Actually Jordan made 30 million In 1996 from his nba salary and 33 million in 1997. get your facts straight.

  23. kobefan2014 says:

    35 mil? LOL. Someone 2/6 in finals definitely deserve more then mj did

  24. armando says:

    Dont leave the cleveland James

  25. courtsideguy says:

    lbj is so paid

  26. MackDaddy says:

    why not.

    when youre the best in the world at what you do, you command the market.

    in basketball, in business, in anything.

    good luck to him

  27. Real facts says:

    He has a lot of pride for his hometown. For him to comeback after what the owner said about him when he left for Miami.

  28. Antonio Perez says:

    lebron putting pressure

    if the don’t do what he says

    and if the don’t give him what he wants

    probably more money , he gets to choose his teammates and coach

    if they don’tt agree to his terms then he just leaves again

    i wonder how much the cavs fan are going to hate him this time

    for braking their hearts again

    or maybe is just another drama for publicity and attention

    lebron the best player in the world

    please i can beat lebron one on one

    easily

  29. CTC says:

    At some point, teams willl have to start asking how valuable a 33, 34, 35 year-old LBJ with a lot of miles on his wheels and a fairly physcial sytle of play will be….

  30. Arthur says:

    Greed

  31. jordan says:

    king of what ?

  32. Angelo says:

    Where did the love for the game go?

  33. Romeo says:

    How greedy can you be? Lebron returned to Cleveland, supposedly his “home town” to help them win a championship and play hero. If he really wants to look like the savior of Cleveland he should look at guys like Duncan, Dirk or his friend D-Wade that really sacrificed something for their respective teams and not find ways to squeeze every last dime out of them

  34. dwyn says:

    james will leave…

  35. Ms. V says:

    No one is worth that much money. Compare that with the large number of unemployed, homeless and underfed people. It is getting to the point that NBA salararies are simply disgusting. The best players in history MJ, Magic & Bird never made that much, they probably with the 3 of them made what Lebron would get in his final years. Nowadays, average players get ridiculous packages for mediocre performances

    • sam says:

      Jordan made 30 plus million dollars a year for a few seasons. Still the highest salary of all time. For the nba. And other sports teams pay even more than basketball. Like baseball

      • taekayo says:

        yup, but those last two 30+M dollars/year resulted into 2 championships, and regular season wins of 70 and 69. And the NBA has also benefitted in getting known globally because of MJ. So yeah, everyone won on that one, except for Utah LOL.

  36. justhavingfun says:

    Good move for a businessman. Well played bron

  37. The Almighty Dollar says:

    It used to be a game … Once upon a time !

  38. taekayo says:

    Aside from the potential money LBJ could get, its all about control. LBJ has put himself into that situation where he can command what Dan Gilbert should do. By keeping Gilbert on his toes, LBJ can now say, “get the players that I want, or I’ll leave” without even saying these words. The last time he did this (before the decision), Cleveland has fired its coach and sent some players packing. But he decided to take his talents to south beach anyway. In Miami, his last days sent Riley crazy on the FA market to get vets LBJ “might need” just to lure him back.

    Now, with this move, LBJ has no commitment to stay in Cleveland (would you take his word that he will???) unless Gilbert follows his every whim this post-season. Get an new coach? Done. Trade half the roster? Done. Build his statue? Done. All it takes so that LBJ would stay. Dan couldn’t face another “Decision”, because he knows he IS the one to blame for another Cleveland heartache.

    Its all about control, it has always been about control.