LeBron James takes his talents to Long Beach, Calif.
By Dan Karpiel
It what may have been the least surprising, but at the same time, enormously consequential, move in the year in the sports, basketball superstar LeBron James announced over the weekend that he will sign with the storied Los Angeles Lakers. James will put pen to paper on a four-year, $154 million contract. The $38.5 million dollar average annual value of the contract will be the highest in the NBA. James turned down his player option of $35.6 million to stay with his hometown Cleveland Cavilers.
Now, yours truly is not really a big fan of the NBA (college and high school basketball are a different story, however) but one does have to give the league, and James, credit for their ability to keep their names in the news year-round.
The NFL, whose playing season lasts only from early September to the very beginning of February, manages to stay at or very near the top of the sports discussion in America year-round. Thanks to savvy marketing (maybe better said, over-hyping) moves around player free-agency in March, the much-ballyhooed draft in April and then with mini-camps in May and June and eventually, the teams’ training camps which begin in late-July, the NFL stays relevant 12 months of the year.
The NBA, which has a far larger footprint globally than the NFL (though NFL is still king in the U.S.) has become such a large force in the sports and news world that James’ signing not only set off alerts on my iPhone from my multitude of sports apps but also my apps from Fox News, CNN, and even Denver’s 9News.
It is the league’s continued growth – measured by merchandize sales, television ratings, and social media presence – that affords the Lakers the chance to pay James almost $40 million per year to shoot, dribble and pass a basketball. According to Spotrac.com, a website that publishes details of player contracts for major American professional sports, James, who is 33, has already taken home $234 million since his career began at age 19. By the time a contract with the Lakers expires, which will probably coincide with the end of his career, he will have earned $388 million just from basketball alone.
James also has a number of outside business ventures and contributes a sizable sum to his charity, the Lebron James Family Foundation, and earns, according to Business Insider, about $55 million per year off the court with his various endorsements and sponsorship deals. With average yearly earnings of nearly $90 million per year, James is the second-highest-earning athlete in the world behind Spanish soccer star Cristiano Ronaldo. James’ combined on- and off-court career earnings to date are just over $765 million.
Does it sound outrageous that LeBron, or any professional athlete for that matter, can make such an astounding sum of money? It does. However, according to a study from the American Enterprise Institute, James’ presence has an economic impact that extends far beyond he and his family. When James played in Cleveland and Miami, the data showed that bars and restaurants located within a mile of the stadium saw sales increase by 13-percent and employment in those establishments increased by 23.5-percent.
In an area the size of metro Los Angeles, the same study estimates that James’ economic impact over the duration of his four-year contract will be, wait for it, $396 million, an estimated 3,000 new jobs and $29 million in tax revenue for the state coffers.
The Lakers are quite possibly the premier franchise in the NBA, with all due respect to the Boston Celtics, and even before LeBron signed were not having trouble selling tickets or getting nationally-televised games. With James, however, the Lakers will be ubiquitous on the sports landscape. In the hours after James’ signing with L.A. was announced, the least-expensive season tickets on StubHub went from $3,499 to $6,500 per seat for the 41-game package, according to the San Jose Mercury News.
As the saying goes, follow the money.
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