LeBron James is a pretty valuable dude. (Robert Laberge/Getty Images)
LeBron James is making $17,545,000 to play for the Miami Heat this year. That's quite a lot of money, but it's not the most money in the league; Kobe Bryant ($27,849,149) is the league's highest-paid player this season. Actually, nine players are being paid either higher salaries than James or the same amount this season — Bryant, Dirk Nowitzki, Amar'e Stoudemire, Joe Johnson, Dwight Howard, Carmelo Anthony, Pau Gasol, Chris Paul and James' Miami Heat teammate, Chris Bosh. Considering James is clearly better than all nine of them, an unparalleled game-changer on both ends of the floor, the league's reigning MVP and (with all due respect to Kevin Durant) the most deserving recipient thus far of this year's award, you can make an argument that he is underpaid. (Many Americans disagree.)
While chatting with reporters on Friday about whether the new collective bargaining agreement (CBA) signed following the 2011 lockout would preclude future "Big Three" team-ups like James, Bosh and Dwyane Wade joining forces in Miami, the topic reportedly changed to the question of James' value and whether he was being accurately compensated for what he brings to the court. According to ESPN.com's Brian Windhorst, James answered honestly:
"What I do on the floor shows my value. At the end of the day, I don't think my value on the floor can really be compensated for, anyways, because of the [collective bargaining agreement]," James said Friday [...]
"If you want the truth. If this was baseball, it'd be up, I mean way up there."
Major League Baseball, of course, does not have a salary cap; players can make as much money as owners are willing to pay them. The NBA does have a soft salary cap for teams and maximum salaries for players; under the terms of the current CBA, the most a player with 10 years of service time (James is in his 10th season) could earn this year would be $19,136,250, according to Larry Coon's NBA Salary Cap FAQ. (Bryant, Nowitzki, Stoudemire, Johnson, Howard and Anthony all make more than that, but their contracts were signed under the prior CBA.)
It's worth noting, before we get too far afield on this, that James also said being the highest-paid player or being appropriately compensated for his true value doesn't matter to him — "It's not all about money. It's about winning. I know that and I don't mind [...] It doesn't bother me because I'm OK, I'm financially stable and my family is OK." So this doesn't seem to be a gripe; rather, it's just an observation.
Still, it's an observation that, on its surface, doesn't sound so great. While James isn't going out of his way to talk about how amazing he is, the notion of $17.5 million being in any way an insufficient payment for services rendered is the sort of thing that will probably hit a lot of folks' ears in a nasty way. Ditto for James' reminder that he has "not had a full max deal yet in my career" — he signed a shorter-than-full-length "mini-max" deal with the Cleveland Cavaliers in 2006, and he, Bosh and Dwyane Wade all took slightly less than full max money to team up in Miami in 2010 — because, to a normal person, accepting $14.5 million rather than $16.6 million doesn't totally seem like making a "sacrifice for the team," as James put it Friday. There will be some folks who think James comes off as a jerk (or worse) for noting that he doesn't get any credit for not demanding the absolute top dollar.
Realistically, though ... he's 100 percent right, isn't he? (About the "can't really be fully compensated" thing. Not the "I should get credit" thing.)
James is the league's best player, capable of being your team's top perimeter scorer, low-post threat, offensive facilitator, perimeter defender, half-court defensive anchor and rim protector. He can assume any position within a team's offensive structure and reliably defend four positions all the time; for stretches and in certain matchups, he can check fives, too. While he's already logged more than 34,000 combined regular- and postseason minutes, he is still just 28 years old and at the height of his athletic prime, and he has never sustained a serious injury. He is in remarkable physical condition, capable of playing at an elite level for 37-plus minutes per night; he is remarkably durable, having missed 33 regular-season games over the past decade (and some of those have been late-season rests with playoff positioning already sewn up).
He has now proven himself capable of performing at the highest possible level in the most pressure-packed situations, raising his play in the NBA Finals to win not only a championship but also, very deservedly, recognition as the series' most valuable player. And he's improving — he's taking better, higher-percentage shots this year, resulting in the best field-goal percentage of his career, and he's shooting a career-high 40.4 percent from 3-point range. Basically the only thing he's not elite at right now is shooting free throws; the improvement from distance (plus stretches like a recent two-week run where he hit 87.1 percent of his freebies) suggests he's capable of sharpening that skill, too.
So, from a pure basketball standpoint, James provides coaches and front-office executives with seemingly limitless options in roster construction and deployment; you can build just about any type of team around him, and his mere presence all but guarantees a deep postseason run. But he adds value from a business perspective, too.
Employing the best player in the world and becoming a winning team makes your franchise a much shinier, more marketable and attractive brand. It opens the door to sold-out home games where fans spend boatloads on concessions and apparel, as well as the extra lucrative gates from multiple rounds of playoff contests, and potentially draws in high-end sponsors, advertisers and partners. By being awesome and making his team awesome, James creates value for a franchise beyond just wins and losses on the court; during a recent segment discussing LeBron, the National Public Radio program "Planet Money" noted that James' exit from the Cavaliers in free agency contributed significantly to that franchise's value declining by tens of millions of dollars, just as his arrival in Miami bolstered the Heat's value by tens of millions.
In that segment, reporter Taylor Tepper says economists he interviewed pegged James' actual worth to an NBA franchise at "closer to $40 million a year." This jives with a June 2010 Wall Street Journal estimate of James' value for the Cavaliers that year at $43 million. I'm no economist, but using a little math we ginned up a few months back to figure out whether or not J.R. Smith really is a bargain, I pegged James' on-court value to the Heat last season at right around $22.6 million; pro-rating it over the course of a full 82-game season rather than a lockout-shortened 66-game slate, it works out to a bit more than $28.1 million.
And again, that's just on-court value, unrelated to any external benefits having LeBron on your team would create for the bottom line, and it doesn't take into account the kind of value inflation of a bidding war sure to come when organizations unfettered by salary limitations have the chance to land the game's top talent. Hell, $40 million might even be low for what he could get in an open bidding with the likes of the league's biggest markets and deepest pockets in the mix. We'll never know, though, because the system within which the NBA operates won't allow it ... which, again, was all James was saying in the first place.
It'll be interesting to see how much blowback James gets for this; if it was two years ago, he'd probably get savaged for these remarks, but the "season of LeBron" and subsequent image overhaul has soothed many savage stances on him. In a conversation about value — real, perceived and tangible in compensatory terms — we might wind up getting an even clearer demonstration of the greatest value of winning ... how it changes the way people look at you.
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