LeBron James is regarded as the best player in the world and was the No. 1 free agent this summer. Now, he is looking out for No. 1.
James plans to sign a two-year, $42.2 million contract with the Cleveland Cavaliers, a person familiar with details of the deal told USA TODAY Sports. That will allow the NBA's biggest start to take advantage of the league's upcoming TV deal, which is expected to increase the value of max contracts.
The person also said this is strictly a business decision. James still is intent on finishing his career with the Cavaliers, as he said in his Sports Illustrated essay about the decision. The person requested anonymity because he was not authorized to speak publicly about the deal.
Rich Paul of Klutch Sports is James' agent, and Mark Termini leads contract negotiations for the Klutch.
James could have taken a four-year contract worth more than $88 million from the Cavs. But he now will be able to negotiate a better contract in two years and also has the choice to opt out after one season to renegotiate next summer. Player options only can come before the final season of a contract, another reason for the two-year deal.
The TV component is important and valuable. The NBA and players share basketball-related income (BRI) at a near 50-50 split, and TV revenue is included in BRI. The higher the BRI, the more money for players.
The person also said this is strictly a business decision. James still is intent on finishing his career with the Cavaliers, as he said in his Sports Illustrated essay about the decision. The person requested anonymity because he was not authorized to speak publicly about the deal.
Rich Paul of Klutch Sports is James' agent, and Mark Termini leads contract negotiations for the Klutch.
James could have taken a four-year contract worth more than $88 million from the Cavs. But he now will be able to negotiate a better contract in two years and also has the choice to opt out after one season to renegotiate next summer. Player options only can come before the final season of a contract, another reason for the two-year deal.
The TV component is important and valuable. The NBA and players share basketball-related income (BRI) at a near 50-50 split, and TV revenue is included in BRI. The higher the BRI, the more money for players.
he NBA's TV deal with ABC/ESPN and TNT/Turner Sports expires after the 2015-16 season, and revenue is expected to increase significantly in the next TV deal. Fox Sports is expected to join the bidding war for television rights, and ratings have been strong for the current networks. That means a max deal will worth more in a new TV deal.Regardless of the TV deal, the league's salary cap, which the value of max deals are based, is expected to increase. With the player option, James gives himself the ability to take advantage of that, too.
Next season, James will make $21,573,398. But if next offseason's max opening salary is projected higher than what James will bring in, he could opt out and take the bigger deal for one year while still being a free agent for the 2016 offseason and new TV deal.
Again, this is a business decision and not an opportunity for James to test free agency again. Consider James has never had a full max salary — he didn't get one with Miami — but now is positioning himself to take advantage financially for the rest of his career.
At some point, he likely will sign a long-term max contract with Cleveland. But for now, he is stretching his value with a unique contract situation.
Also don't be surprised if James negotiates and re-negotiates max deals that are shorter in length for the next few seasons. The players and owners have the option to terminate the current CBA after the 2016-17 season, which could lead to another change in maximum contracts. There is another component to James' strategy, too. He is the face of the NBA right now, and he is sending a message to other players: Take advantage of the financial position.
Sure, James is doing what's best for him, but he is also encouraging other players to do the same.
source: usatoday.com
Next season, James will make $21,573,398. But if next offseason's max opening salary is projected higher than what James will bring in, he could opt out and take the bigger deal for one year while still being a free agent for the 2016 offseason and new TV deal.
Again, this is a business decision and not an opportunity for James to test free agency again. Consider James has never had a full max salary — he didn't get one with Miami — but now is positioning himself to take advantage financially for the rest of his career.
At some point, he likely will sign a long-term max contract with Cleveland. But for now, he is stretching his value with a unique contract situation.
Also don't be surprised if James negotiates and re-negotiates max deals that are shorter in length for the next few seasons. The players and owners have the option to terminate the current CBA after the 2016-17 season, which could lead to another change in maximum contracts. There is another component to James' strategy, too. He is the face of the NBA right now, and he is sending a message to other players: Take advantage of the financial position.
Sure, James is doing what's best for him, but he is also encouraging other players to do the same.
source: usatoday.com
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