Nike's Role in the LeBron James Sweepstakes
What do the New York Knicks, New Jersey Nets, San Antonio Spurs, Chicago Bulls, Detroit Pistons, and Portland Trail Blazers all have in common?
Each team has been mentioned as a potential suitor for LeBron James in 2010, when his contract expires with the Cleveland Cavaliers.
These franchises all have the cap room to make a run at James and the media has had a field day weighing the pros and cons of each destination, even though his decision is still two offseasons down the road.
While each team feels that they have the pieces to lure LeBron, the biggest player come 2010 may very well be Nike, who can offer the superstar more money than any of the competing NBA clubs and will definitely make their presence felt throughout the course of the LeBron James sweepstakes.
For the past couple of years, a rumor has continued to pop up that a clause exists in James' contract that would increase his earnings if he were to sign with a team in a large market such as New York or Chicago. While this sounds good, it is simply not true.
No such clause exists and I'm not sure how the rumor started. One thing that is true however is that LeBron would likely make more money if he were playing in a larger market, even without this imaginary contract clause.
Nike rewards bonuses to its athletes if they reach certain sales goals. According to reports, LeBron has failed to reach any of these marks during his tenure with the Cavaliers, a trend that would likely change were he to play for a larger market.
So while it’s false that LeBron's salary will jump if he heads to a larger city, he would likely make more money in the form of bonuses in a bigger market, increasing his earnings without any clauses.
Even if there were a kicker in LeBron's current contract, it wouldn't matter in 2010. This is because James' contract will expire that year, making him a free agent in both the NBA and the shoe market.
This gives Nike even more power as they'll be able to offer a larger contract if he signs with the team of their choice. This means they could be improving James' bank account with both guaranteed money depending on where he signs and through the bonuses he'll rack up once he gets there.
But Cleveland has LeBron's Bird Rights, meaning they can offer him a lot more money thanks to the NBA's Collective Bargaining Agreement, canceling out any attempts by Nike to control his destination, right?
In an interview with Sports Illustrated several years ago, when LeBron's rookie contract was coming to an end, one Western Conference executive pointed out that Nike doesn't have to follow the NBA's salary cap and can eliminate Cleveland's Bird Rights advantage.
"He may be willing to sign for nothing more than the mid-level-exception [$5 million] with the understanding that Nike will make up the difference," the executive said.
That means LeBron could sign with a team like the Los Angeles Lakers or Boston Celtics for cheap, forming an instant championship favorite while still making the same amount of money as he would signing a max deal with a less dominant club. While this is unlikely, it's a possibility and shows just how much weight Nike carries in this process.
A similar technique was used by the New York Knicks in 1996 offseason when they were pursuing Michael Jordan. While they couldn't offer a higher salary than the Chicago Bulls because of the NBA's salary cap rules, they could sweeten their deal with potential endorsement money and holdings in Sheraton Hotels, a property of ITT that was run by Knicks' ownership.
Sam Smith, a writer for Bulls.com, would go on to write that "the plan being cooked up was to somehow get Jordan substantial Sheraton holdings, perhaps in endorsement money which would be separate from the salary cap and seemingly within the rules."
While the details are sketchy because a deal never went down, Nike could work out a similar plan if it wanted to direct James to a large market and, as the Western Conference executive said, "make up the difference" between Cleveland's offer and another team's proposal.
Nike not only has the power to offer LeBron incentives based on his sales performance, but also work outside the constrictions of the NBA salary cap to rid Cleveland of any monetary advantages, evening the playing field for teams that Nike wants LeBron playing for.
Based on his past career moves, LeBron's main objective when his contract expires is to get the most dough possible.
When his rookie contract ended in 2006, James rejected a max deal, opting to sign a three-year contract with an option for the fourth year instead, putting himself in position to sign another large contract when he hit his prime in 2010. He was criticized for this at the time as other young stars, such as Carmelo Anthony and Dwight Howard, chose to sign for max contracts, deciding to show loyalty to their team rather than collecting the extra cash.
And if money is what LeBron wants, money is what he will get if he cooperates with Nike in 2010.
They undoubtedly want basketball's biggest star playing in a market that will lead to increased sales production and a wave of new fans drooling over his shoes and in 2010, we will all “Witness" the company doing its best to guide LeBron to a larger market that benefits both him and the brand.
Alex Kennedy can be reached at firstname.lastname@example.org. This article was originally published on RealGM.com, where Alex is a featured columnist.
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