Basketball legend LeBron James also popularly known as “King James,” has set a record as the first active NBA player to become a billionaire and the second NBA player to reach the billionaire status after retired basketball star Michael Jordan.
It took LeBron James 18 long years of hard work to make his first million. After becoming a millionaire, it took another 19 years for him to reach the billionaire milestone. The road to ten figures was a long one that saw him venture into partnerships and investments with different companies and in different industries, ranging from music to food.
But how did LeBron, who had a difficult childhood with his mother trying to make ends meet, amass such wealth? It all started with his first major brand endorsement deal with Nike.
LeBron Walks Out On $10 Million.
In 2003 everyone was talking about Lebron the high school basketball maverick from the small city of Akron in Ohio. In 1984 Michael Jordan signed a deal with Nike in what would be the beginning of a very long and successful relationship. The Jordan-Nike partnership proved to be quite profitable, and when LeBron James emerged, all of the major shoe brands were scrambling to sign him in the hopes of striking an equally lucrative deal. The top contenders among these brands were Adidas, Reebok, and Nike, who were scheduled to pitch him.
Reebok pitched first, offering a ten-year deal of $100million, with a bonus check of $10 million if he signed the deal on the spot. As tempting as that offer was, LeBron surprisingly turned it down with the hopes of weighing other offers before making a decision. Adidas was next with an inferior deal of less than $60m. Then came Nike, who initially offered a ten-year deal of $70 million.
With the first offer of $100million still open, LeBron at first declined the Nike deal. However, try as he may, his heart was not with Reebok. His childhood dream was to be part of the Nike brand like his hero, Michael Jordan.
He wanted to wear their shoes and feature in their legendary commercials. So even though it was an inferior deal, he continued negotiations with Nike, eventually signing a 7-year $77 million contract. In 2015, that initial deal was then followed by a lifetime deal reportedly worth over a billion dollars, putting a permanent seal on the relationship between LeBron and Nike.
This story, in a nutshell, illustrates LeBron’s biggest motivation for signing any deal-
passion.
The Power Of Partnerships.
LeBron James did not stop at being a basketballer but has gone on to build a multimedia empire-Springhill Company, with his childhood friend, Maverick Carter. The roots of what would become SpringHill started in 2007 when Carter reached out to him with hours of footage of his time in high school and asked for LeBron’s help to turn it into a documentary.
The documentary was called More than a Game and featured Lebron’s time in high school. Lebron and Carter then agreed to go into the powerful partnership that birthed what is now known as the SpringHill Company. Since then, the company has racked up an impressive filmography, including hits like Space Jam 2 and Survivor’s Remorse.
Lebron’s decades-long relationship with Maverick Carter might be the best example of how good partnerships have helped grow his business. Soon after he signed the first Nike deal, he tapped Carter to be his man on the inside, acting as a liaison between Nike and Lebron. Since then, Carter has led all his business efforts.
Taking Ownership.
Most endorsement deals with athletes or celebrities follow the same pattern-the athlete is paid a sum of money to promote the brand for a period of time, after which they go their separate ways. While this is an excellent way to get rich quickly, Lebron figured out early in his career that it was not the way to build lasting generational wealth.
With this insight, he structured his partnership deals from the onset to give him equity in the brands he would promote. For example, Lebron became a partner in Beats in the company’s early days, helping build hype around their new product by distributing it to his teammates at the 2008 Olympics. He walked away when Apple purchased the company with a whopping $30 million.
Lebron also has equity in other brands, including English top flight football club Liverpool and Restaurant chain Blaze pizza.
Thinking Big
In 2014, Lebron decided to return to the Cleveland Cavaliers, and he opted to make this announcement in a letter to Sports Illustrated. Bearing in mind the uproar that greeted his announcement to join the Miami Heat in 2010, LeBron decided to send a direct message to his fans this time.
By owning his narrative, he could control the process, ensuring his message was not reduced to soundbites by the television networks. This birthed the idea for Uninterrupted – a digital media platform similar to The Players Tribune for athletes to connect with their fans in real-time.
As usual, LeBron was thinking big, beyond creating just one media platform. He wanted to create a media and entertainment empire. In 2015, Warner Bros. Entertainment and Turner Sports invested $15.8 million in Uninterrupted, affording the platform the chance to create content across multiple channels.
In 2020, Lebron unified all of his media and entertainment efforts under the umbrella of the SpringHill Company, with the company receiving a valuation of $725 million after selling a minority stake to investors, including Nike and Epic games, in 2021.
For Lebron, the sun is slowly setting on an illustrious career that saw him evolve from a teenage basketball star to an NBA and Olympic champion. Although his best days as an athlete may be fading, a brighter future awaits, and having a billion bucks would surely hasten the journey towards it.
