How much is Lebron James worth? Can an athlete/artist be worth that much?

By: ispeculatornew
Date posted: 07.02.2010 (4:00 am) | Write a Comment  (3 Comments)

      Post a Comment

You have surely lived through this conversation and maybe you are even the one making the argument: “Why would xxx be paid $30 million for a year or for a movie when my aunt makes 0.01% of that working as a teacher, a job that has a huge impact on society? I understand where the argument comes from but I disagree  100%.  Why? Because I generally believe in the free market and the price of these individuals is more or less set by the free market. In the case of sports, certain rules such as salary caps actually limits the salary that can be paid to any one individual but I will not go as far as to argue that they are underpaid, don’t worry.

It is a business

No matter how you look at it. Sports and Entertainment are now businesses and managed as such. A basketball team will charge as much as it can for its tickets in general without increasing too much from one year to another to avoid alienating the fans. But sports teams in major sports make hundreds of millions in revenues every year through ticket sales, equipment, tv contracts and more. That would come in no matter what they paid their players. So my first argument. If a team is making $200-300 million of revenues per year, do you think players should make a significant portion of those revenues given the fact that they have the most influence over those revenues (through their performance and star power).

Lebron James

In case you have lived in a cave for the past 5 years, Lebron James, the biggest star in the NBA right now and arguably the biggest sports star out there right now became a free agent yesterday. He was a player of the Cleveland Cavaliers and while he might return there next year, everyone is preparing for him to leave. That would have dramatic impact for the team, the city and even the state. But as a free agent, he now has every other team also making a case for Lebron to sign.

Impact

What will be the impact for the team that will sign Lebron James to a long term contract? It will be on many many levels:

  • Playing field: Within a few seconds of a team signing Lebron, they will become a Championship team. Cleveland has been the top team in the NBA but projections are that without Lebron James, they will sink below the league average. Yes, he is THAT GOOD.
  • Tickets: Not difficult to imagine. Any team that signs Lebron James will have thousands of calls for individual tickets, season tickets, boxes and luxury boxes. The financial impact will be very significant.
  • Other Players: Easy to imagine.. Once you have Lebron James in your team, it becomes a lot easier to ask other star players to come join the contender. So signing Lebron James will mean being able to sign a supporting cast a lot more easily.
  • Other impacts: Having a Championship team for a few years does have significant impacts from helping build a young fan base, to getting the city and governments involved, etc. Corporate sponsors will  also be signing up to have their name associated with the team and indirectly the player

So how much is he worth?

Rumors are that the Cleveland Cavaliers team value will drop by over $250 million if Lebron does not resign because of all of the factors described above as well as many others. I think it is easy to make the case that he is worth that much. Unfortunately (or fortunately depending on your point of view), no one will be able to give as much to Lebron James because of the salary cap. Because of that, getting Lebron becomes more about convincing him that he will be happy, play on a winning team and more. What are your thoughts on Lebron James’ value as well as on the general debate of athletes and entertainment salaries?

If you liked this post, you can consider subscribing to our free newsletters here


3 Comments

  1. Comment by John — July 2, 2010 @ 6:50 am

    Now, probably, King James becomes the most preferred free agent in NBA history hehe He has to choose if he should stay or should he go!?!! (check this out http://fansided.com/wp-content/uploads/2010/07/LeBron-Graphic5.png) Where’s the future? Or Money will help him to decide? The greatest impact would be for fans!! Everyone wants James in their team hehe He’s a star! He’s a great player! Great post!

  2. Comment by John — July 2, 2010 @ 6:51 am
  3. Comment by IS — July 3, 2010 @ 10:39 am

    Hahah, thanks for posting that John, very intresting link:)

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.