Brazil WCup LeBron James
After signing a two-year deal with the Cavs, LeBron James attended a World Cup soccer game in Brazil.
(AP)
CLEVELAND, Ohio -- Fans may wonder why LeBron James
worth $42.1 million with the Cavaliers.
In fact, James can opt out of the deal after the first season. The second season is a player option.
Why guarantee only $42.1 million, when a full maximum contract is $88 million over four years for a player switching teams.
Telephone calls to those close to the situation revealed the following:
1.
Remember that James has never had a full maximum contract. With Miami, he was tied with Chris Bosh for being the highest paid player on the team. With the Cavs, someone else always had that distinction.
It all had to do with salary cap considerations.
2.
James makes between $50 million and $80 million EACH season in off-court endorsements. That income will continue to rise. So unlike some players who don't have massive endorsement contracts, if he wants to bet on himself staying healthy and the salary cap rising -- he can do so. In other words, he doesn't feel the need to have four years guaranteed at $88 million.
3.
The salary cap rises 7-10 percent most seasons. The moment you sign a long-term deal, you are locked into that deal. Those close to James estimate that the starting salary for the maximum deal next season could be at least $22 million. So they want to keep their options open when it comes to the contract.
4.
It would not be a shock if James opted out of his deal at the end of the season, and signed another 2-year contract this like this one -- only the starting point would be that estimated $22 million.
5.
Two years ago, the starting point for the maximum deal was about $18 million. Now, it's $20.7.
LeBron James' agent Rich Paul is from Cleveland and helped James figure out the right way to return to the Cavaliers.
6.
James developed this strategy with his agent Rich Paul and contract negotiator/attorney Mark Termini. Both are Cleveland guys, and Cleveland-based. Paul went to Benedictine and represents Cavs forward Tristan Thompson. Termini attended Holy Name and has been a long time agent/attorney, one of his first clients being former Cavalier Ron Harper.
7.
The point is the men representing James are from Northeast Ohio and understand why James wants to stay here. They were thrilled with the letter in Sports Illustrated about why James re-signed with the Cavaliers. Home is very important to them, too. And they want to cut the best possible deals to keep James here.
8
. The new NBA television deal will start in 2016, and the salary cap may take a huge jump. That could be when James signs the long-term maximum. James will be only 31. They are positioning James to cash in at that point -- or at least, have the option.
9.
James believes he has been under-paid for years. The Cavs will probably sell out every game this season thanks to his return. James and his representatives know that other teams have told their players, "LeBron isn't getting the max-deal, why should you?" They believe there is a bigger issue here -- that the owners are making lots of money off stars, and stars deserve the biggest cut possible.
10.
Yes, it's about making deals and slanting them in your direction. But they argue that owners such as the Cavs' Dan Gilbert do the same in their businesses. For Gilbert, that's Quicken Loans and casinos. No one is running a charity.
11.
James was upset when Miami won back-to-back titles in 2012-13,
in 2013-14 to save money on the luxury tax. While coming home was the main attraction to signing with the Cavs, the actions of ownership in Miami also were a factor. James knows that Gilbert will spend. As I wrote, Gilbert's final two seasons with James (2008-10) had higher pay rolls than Miami ever had with James.
12.
James loves business and deals. He wants to have the most leverage and edge possible. He believes this type of deal delivers that.
13.
The Cavs are willing to take James on any terms -- and they should. James just traded an established President/GM Pat Riley and Coach Erik Spoelstra in Miami for two rookies with the Cavs -- General Manager David Griffin and Coach David Blatt. He likes them, but they have no real track record.
14.
Paul and Termini presented several options to James, starting with the $88 million for four years and working to this current deal. This is what he picked.
15.
James believes that the summer option does not have to cause angst, that it can be worked out quietly after the season. At least, that's his goal.