Jul

11

Lebron, from Dan Grossman

July 11, 2010 |

the announcement At $25 million a year, plus a larger amount in endorsements, of course Lebron James chose Miami over New York, LA and Cleveland. Florida has no income tax. While those other states are among the highest tax states in the country.

Scott Brooks comments:

But that tax wouldn't make up the money he lost ($30 million) by signing with Miami over Cleveland.

J.T Holley writes:

The math is 12 million in difference for the length of his contract in State Taxes saved. That's over 35% saved in my book, better supporting cast, nice climate (Miami has never had a 100 degree weathered day recorded), So. Beach, he gets to finally be a man and leave home, and the insiders could've shorted MSG from let's say 21 to 19 leveraged? I'm just sayin'.

The King seems to be following the advice of his consultants rather well. In the Navy the ole' sayin' is "loose lips, sinks ships". I was quite surprised that MSG didn't spike more than it did and go a few more deviations to the upside. The tight lipped coverage and suspense was brilliant and had to be hard to keep up. This is especially amazing to me considering Wade and Bosh were also involved in the dealings ultimately in the decision.

There has to be a study of "high profile" free agents and "warm weathered" correlation to be done when it comes to money and choices. Does anyone know of a high profile athlete that choose a "cold weathered" city when the initial contract was up? Just sayin'?

David Wren-Hardin comments: 

Jody Rosen over at Slate had a short piece that I think nails it.

New York is no longer the hip place to be. For a young, minority millionaire, the post-racial (or allegedly post-racial) melting pot of Miami is the place to be. Everyone scratching their heads about tax breaks, endorsements, and culture is living twenty years in the past.
 


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2 Comments so far

  1. steve on July 11, 2010 7:18 pm

    Your hubristic analysis of Lebron James is interesting but essentially useless. There are numerous variables that factor into a decision such as an athletes selection of a basketball team to sign with. Many of them do not always revolve around money.

    I remember Karl Malone signing with Gary Payton and the Lakers as free agents for the to try and get a championship ring. They both signed for the minimum league salary. Interestingly, the strategy did not pay off. Neither ever got the elusive ring.

    Michael Jordan was the most underpaid basketball player in history with a $3Million salary staying with the Bulls and honoring his contract rather than demand a trade to another team. He won 6 rings in Chicago.

    Cal Ripken Jr. stayed with the Orioles his entire career rather than choose a competitive alternative. He never won a world series ring.

    Don Mattingly played his entire career with the Yankees and never got a World Series Ring.

    Wayne Gretzky took a deal to go to the LA Kings and essentially floundered there for several years. He wanted to bring hockey to LA and his wife lived there at the time.

    Barry Sanders retired at the peak of his game with the Detroit Lions instead of taking the money and moving elsewhere which would have virturally extended his career by at least 4 years and guaranteed him rushing records.

    Larry King decided to stay with CNN than sign with competitors such as FOX. He liked his job and his slot at CNN and he liked Ted Turner.

    Lebron James has already insured himself barring egregious financial mistakes that he will be a billionaire by the time he is 40 if not sooner. How many 25 year olds earn $50-100 Million a year through pay and endorsements.

    I am not so expert to suggest what finally pushed him to decide on Miami and since nobody here knows him nor is privy to the backroom deals that his team of agents, and advisors worked on this is just mindless conjecture without basis. If this site teaches anything it teaches ballyhoo deflation and the scientific method.

    If you want to work on something complex, come up to a solution to 9.5% unemployment, soaring national debt, unpopular health care plan, porous US borders, and an administration that wants to grow the government to an impossible and unmanageable size.

  2. Evan on July 17, 2010 9:21 pm

    I’m surprised you guys didn’t understand that NBA players pay taxes that are pro-rated to where the game is played. For example, when the Heat play the Knicks in NYC, players pay NY taxes.

    While half of the games will be played in Florida, that alone is not a very significant financial reason to consider the Heat over many other teams with larger markets or, in the case of Cleveland, able to pay much higher salaries.

    And anyone that thinks LeBron is going to be a billionaire is crazy. His brand just took a major hit, he was never making $100m a year, and he is surrounded by financial morons (he himself fired his agent that landed him many of these deals in favor of childhood friends), most of whom are friends who have no money management experience whatsoever–a disaster waiting to happen.

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