Conor O’Mahony discusses LeBron James’ decision to opt out of his contract with the Miami Heat and explore the other options at his disposal.
For most of the seven billion or so inhabitants of the world the mere thought of walking away from earning a guaranteed $20 million would be immediately be dismissed as an act of madness. But that is exactly what LeBron James did Wednesday morning, when he informed the Miami Heat organisation of his intent to opt out of the final year of his contract.
The inescapable conclusion is that this was the correct move on James’ part. LeBron is easily the in the top three of the biggest stars in US sports, yet his earnings do not reflect that absolute fact. As ludicrous as it sounds, this writer actually believes that LeBron James is severely underpaid.
He is underpaid for not only his skills on the court, but for the money he makes the Heat off of the hardwood. He’s getting paid a fraction of how much the Heat organisation are raking in, in merchandise sales from him. LeBron’s jersey is the best-selling jersey in the NBA as of last season.
The Heat ticketing plan has been changed since LeBron joined the team. In 2009-2010, the average Heat ticket cost $58.57. In 2013, the average cost of a Heat ticket was $72.50, the fourth-highest in the league. Since LeBron got to Miami, Heat tickets have gone up $13.93 while the league average has increased by $2.12.
Also consider that the Heat’s average attendance at home games was only the 15th highest in the league, in the season before LeBron chose to “take his talents to South Beach.” According to ESPN, in 2012-2013 (most recent info available) the Heat now have the 3rd highest attendance of any team in the league. Don’t forget about all the added revenues from four straight seasons of NBA Finals runs, which certainly doesn’t impact negatively on the bottom line. That’s not even factoring in TV money.
When the Cleveland Cavaliers lost LeBron in the summer of 2010, the franchises value took a historical nosedive—a 26 percent nosedive. That translates to $121 million. With the stroke of a pen LeBron drove the Cleveland value down 26 percent and the Miami value up 17 percent in one summer. That’s a swing of $182 million from one guy. That’s unbelievable.
Joe “Jesus” Johnson. Amare “Uninsurable Knees” Stoudemire. What springs to mind when you hear these names? One was an above average shooting guard, who was at best a second option on a mediocre Atlanta Hawks team. He played big minutes and dominated the ball in a stagnant offense and inflated his stats accordingly. In the 2010 playoffs Johnson averaged 11.8 points per game in the second round, shooting a terrifying 29.5 percent along the way. Hawks ownership felt that they were backed into a corner, afraid to leave one of their biggest assets walk away for nothing. This was understandable to a point, but paying over the odds to secure a player long term only goes so far. Handing over $120 million for a guy who has yet to do anything more meaningful than dribble and shoot a lot is that point. It looked to be a bad contract at the time, and it only looks worse now. That guy receives more dollar from his team than James. (Apologies Brooklyn Nets fans!)
Stoudemire’s contract is not as straightforward. Obviously committing $100 million dollars to a guy who has been unable to stay on the court for most of his New York career now looks like a terrible move on the Knicks’ part. Most Knicks fans still curse James Dolan for his stupidity in making that deal. But let’s take a few steps back, and cast our minds back to the fascinating off season that was the 2010 Summer.
The Knicks had spent the previous two seasons unloading bad contracts to clear sufficient cap space to pursue the marquee free agent LeBron James. Hilarious as it now seems, James Dolan was even going around telling people that the Knicks were going to land LeBron James, Joe Johnson and Amare. This would involve all three taking less-than-max money to form a big three in New York.
From early on it was obvious that Dolan’s dream scenario was not going to come to fruition. It became painfully obvious that they were not going to be coaxing three big names to come play in Madison Square Garden. The Knicks were now faced with the real possibility of missing out on landing a player with the potential to turn around the fortunes of the Knicks franchise.
Coming off nine consecutive losing seasons, this would be a crushing blow for fans and ownership alike. The Knicks had pinned their entire future on this off season, and they absolutely had to sign one free agent from the group of James, Johnson, Stoudemire, Dwyane Wade, or Chris Bosh.
Amare Stoudemire emerged as the only elite talent willing to come to the Big Apple. Although the doctors declared Stoudemire’s knees uninsurable, signing Amare was a necessary evil. The Knicks just couldn’t strike out looking on LeBron and everyone else. They would’ve been the league’s laughing stock — for old time’s sake — if they ended up with truckloads of available cash and nobody willing to take it.
“The Knicks are back,”
Stoudemire infamously said in his first media briefing. The statement now seems ridiculous, but it is too easy to be a hurler on the ditch and just put the Amare deal down as another “Dolan Disaster.”* When Stoudemire landed in New York he garnered love and adoration from all the Knicks faithful. It just didn’t work out.
No matter what way you toss it however, one cannot argue that the man affectionately known as STAT does not deserve to be in the same earning stratosphere as LeBron.
By opting out James can now sign a deal that accurately reflects his true market value. LeBron sacrificed his own personal earnings in 2010 to create a team capable of winning championships. Four Finals appearances and two championships later, and it’s safe to say he has accomplished this goal. It is not fair to ask the most talented player in the league to take another pay cut to possibly give his team a better shot at winning the championship. It is the prerogative of Pat Riley to now put an offer on the table that accurately reflects LeBron’s worth to the Heat organisation, and recognise his immense talent. Dwyane Wade and Chris Bosh should be the guys who restructure their deals to give Riley some money to go out and improve the team.
Pat Riley is trying to convince LeBron to take less money. He has publicly challenged the team to stay together and not to “run outta the first door if you get the opportunity.”
Who are these comments directed at exactly? Bosh, who has already said publicly he is going nowhere? Wade, a Heat lifer who needs large parts of the regular season off and could easily be replaced with a better alternative if he walked? No, he is calling out LeBron.
Wade despite all he has done for the Miami Heat over his fantastic career is now a liability as he stands to earn $41 million over the next 2 years; far more than he is now worth. It is now Riley’s duty to do everything in his power to avoid paying Wade $41 million, and to try to get Wade to agree to renegotiate his deal, accepting less money but giving him a longer contract.*
Ideally Wade would opt out and leave town, allowing the Heat to sign a star who could help LeBron in his drive for more titles in Miami. News flash, that is not happening.
The lose-lose scenario for Wade comes down to this: Should Wade decide to exercise his player option and collect $41 million over the next two years, it is almost a certainty that at least James—and possibly Bosh—would leave Miami and Wade would be blamed for the collapse of the Big Three.
The problem is Wade is breaking down in front of us. He is entering end-game as regards his career. These next two years will also be Wade’s final chance to earn a significant salary before either retiring or seeing his value drop dramatically.So if you took just a moment to view the situation through Wade’s eyes, you would quickly come to the conclusion that Wade would have to be insane to opt out of his two-year, $41 million option and take yet another pay cut to stay in Miami.*
Wade essentially has the entire Heat organisation hamstrung (LeBron in particular), and it will be fascinating to see what he does next.
Pat Riley’s job is to put the best possible players around LeBron, but the way he is going about doing it is completely wrong, and deeply disrespectful. James has to do what is best for him in this writers opinion. Michael Jordan never took a paycut in his career, in fact the opposite was true.
Like LeBron is now, M.J was making head spinning amounts of money from endorsements, but when his contract came up for renewal he still demanded to be paid properly for being the best player in the league. Kobe Byrant is no longer anywhere near the best player in the league, but still did not agree to a pay cut so the Lakers might be able to chase free agents this summer. Yet for some reason the vast majority of people want LeBron to decline the max contract he undoubtedly deserves. This writer does not get it.
The old Chinese curse “May you live in interesting times” is very much applicable to Pat Riley and the entire Heat organisation right now.
For the rest of us, it times to reach for the popcorn, sit back and enjoy the next few weeks to see how all this plays out.
Conor O’Mahony, Pundit Arena.
I apologise for the length of this piece, but I felt that every column was essential in putting forth my personal belief that LeBron is completely in the right to demand a max contract.
*Im not trying to say that anyone really should receive that amount of money when millions throughout the world starve. The fact is however, James is playing an extremely lucrative sport, and as the best player in that sport, deserves to receive a large slice of the revenue.
*I’m not saying Dolan is some kind of brilliant owner. He isn’t. The guy traded away all the Knicks rotation to sign Melo, when he could have signed for the team that summer because Dolan couldn’t wait. I don’t think any of us are likely to forget David Stern’s comments in 2007 on Dolan: “they’re not a model of intelligent management.” Allan Houston received a $100 million max contract on his watch, when no other team had offered $75 million for Houston’s services. I’m not trying to play devil’s advocate. There is a solid body of work there that shows that Dolan has been a spectacularly bad owner, but in this instance I refuse to criticise him. Sure, criticise him for putting the Knicks in the situation where they were on a nine-season losing streak, and simply could not afford to be bad for another year. But don’t criticise him for paying STAT, when in reality his options were limited.
*A guarantee of some kind of front office job after he hangs up his jersey would likely be part of this agreement.
*Wade was up for a max contract before convincing LeBron and Bosh to come and play in South Beach.
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