Whither LeBron? Part II
Before getting back to LeBron, the first day of Free Agency in the NBA showed the true disparity in player compensation between the NBA and the NFL.
The Memphis Grizzlies, a team that shipped out Pau Gasol to the Lakers a couple years ago to move his salary, re-signed Rudy Gay in a five-year deal that will exceed $80 million, all of it guaranteed. Gay now makes twice as much guaranteed money as the highest guaranteed contracts in the NFL (Albert Haynesworth, Matthew Stafford) and several times the amount of some of the NFL’s top players.
And again, that’s for Rudy Gay and from the Memphis Grizzlies! Wow.
Traditionally top athletes in team sports have had the money but not the power. The LeBronathon shows a changed with this situation.
LeBron and supporting actors Dwayne Wade, Chris Bosh and perhaps Joe Johnson and Amare Stoudemire have shifted the power paradigm. James and Wade – and perhaps Bosh and the others – have discussed this scenario for since the time they agreed to deals that expired simultaneously: the possibility of playing together to maximize their chances of winning. James now controls the destiny of several teams as they scurry to beg and plead for his services. Moreover, James has the power to form a duo or trio that can potentially earn maximum salaries, play together and put them in a position for sustained success.
The maximum salaries allowed for NBA superstars do not nearly approximate the value to the franchise a player such as LeBron brings. For his $16.5 million salary with a new team or even with the Cavaliers, he will bring an estimated $20 million in ancillary marketing income and raise the asset value of the franchise up to $250 million. He will be the best value-add in sports.
The power players here are the players, not the league or the teams. His choice to have teams travel to him in a businesslike setting shows LeBron – who counts Warren Buffett and Jay Z among his advisors -- is far beyond his years in his dealings.
The recruiting process
The recruiting pitches have begun and will certainly be over the top. I always smile when I hear about the lavish recruiting that teams do, as being in Green Bay for nine years our recruiting consisted of flying a player in on a commuter plane from another Midwestern city such as Chicago or Detroit, giving them a tour of Lambeau Field and taking them to dinner at a place like The Prime Quarter, where patrons cook their own steaks. Reggie White always talked about that visit.
Recruiting is a short-term seduction process. Owners, general managers and coaches get caught up in the chase and let emotion make promises they perhaps cannot keep, a reason so many free agent signings go south.
Handicapping the future
Here are two scenarios that I would think could play out with LeBron, certainly not novel but looking at it from a perspective of maximizing earnings and legacy.
1. He brings a friend (or two).
The historic class of 2010 presents a unique opportunity to have two -- or three -- elite players sign with the same Cap-advantaged team and become uniquely positioned to win. Of course, these discussions among the players have not been ongoing for years.
This scenario fits with Chicago and for two stars and Miami or New York for perhaps three. The Heat need to unload Michael Beasley and his $5 million salary – which they are feverishly trying to do -- to allow potential maximums for all three. The Heat currently have $42 million in Cap space and would need Beasley’s number to get close to the $49.5 million needed for three max deals.
2. Sign short
The longer the deal, the more value LeBron gives the team, although not necessarily the more value he creates for himself.
So often in free agency, in all sports, players and teams enter into long-term contracts, usually because the longer the player signs the more he makes. And more often than not, either the player or the team regrets the length of the deal and one side or the other (or both) starts to look for a way out.
LeBron can control this so that the recruiting process just continues indefinitely and the passionate start does not fade into oblivion. The NBA will be going through labor issues just like the NFL but it is hard to imagine deeper restrictions on superstars than what is now in place.
Under this scenario all potential destinations are in play.
My best guess on LeBron’s new employer? I would give a slight edge to the Bulls in a dead heat – pardon the pun -- with Miami and the Knicks. The Heat and Knicks may offer the possibility of two other max stars besides LeBron but the Bulls will allow him to bring one other plus the young nucleus of Derrick Rose, Joakim Noah and others.
What about his incumbent team the Cavaliers? I know many are predicting he will stay and has emotional and family ties to the area. I'm just not feeling that from the process. My sense is if were going to stay, there would be no LeBronathon as there is ocurring now.
As with so much in the world of sports today, the biggest stories are nowhere near the game action.
Have a wonderful 4th, everyone...
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