Everyone around the league knew that following the massive $24 billion NBA media deal, there would be an increase in the league’s salary cap and, subsequently, a massive increase in player salaries.
But it still comes as a surprise that yesterday, within the first 24-hour period, that NBA teams were able to reach out to players and begin contract negotiations. The 30 teams reportedly agreed in principle to spend a collective $1.4 billion. This number doesn’t even include the richest contract in NBA history, or several big name free agents, including Deandre Jordan, Lamarcus Aldridge, or Dwayne Wade – each of which will command max, or near-max salaries.
That staggering amount of money is in large part the reason why Lebron James is signing on a year-to-year basis, giving himself the flexibility to adapt to the changing NBA landscape, especially as the salary cap increases each year.
In a couple of highly circulated articles that have surfaced within the last few years, economists, financial professionals, and NBA experts calculated and discussed at length what a do-it-all player like Lebron James would deserve if he were truly paid for his value to the NBA, as well as his on-court contributions – if there were no salary cap. In 2010, as James was headlining a talented class of free agents, the Wall Street Journal pinned down a number, “Mr. James would earn $43 million next season, 159% more than the $16.6 million he’ll likely receive.” Deadspin, using another set of complicated metrics, determined that following the 2013-14 season, James production and value had remained exceptionally higher than his $19 million salary, and valued him at roughly $44 million.
In a major sports league without a salary cap, it would still be fairly unlikely that James would command that kind of salary. And in the NBA, with its strict salary cap, luxury taxes, and contract provisions – it’s laughably impossible. Or is it? Anthony Davis, a 22-year-old heir apparent to the James crown, just came to an agreement to sign the richest contract in NBA history – worth a reported $145 million over five years, or a yearly average of roughly $29 million per year. Davis’ deal is almost equal to Lebron James’ lifetime earnings in the NBA.
“…he’s someone that anyone would want to play with and he also is a showman. He’s a pitch man. He’s a walking public relations advertisement for Northeast Ohio. He makes money for people. You know, they’re talking in terms of when the new NBA contract kicks in, in a couple of years, and a new TV deal takes hold, that his next contract – not this one. This is going to be a one-year bridge contract – would be for upwards of 40 – I said four zero – million a year. That’s how valuable he is.”
Just a few years ago, the idea that James, or any NBA player, could earn $40+ million in a season was tough to digest. Now it seems like a bargain.
Hall of Fame player and current analyst Reggie Miller expressed his support for the players cashing in –
I LUV that the players are bank rolling, capitalize and seize the moment.. Trust me the owners and league are making money, so should you..
— Reggie Miller (@ReggieMillerTNT) July 1, 2015