Tag Archives: team owner

Luring Lebron

 

So I was thinking about this a little bit more and thought it makes a whole lot of sense.  Sure, there are about a half-dozen teams that will offer James the max salary, probably something close to 30M/yr for 6 years.  But is that enough to get Lebron?  I don’t think it is, because he can get a team to the Eastern Conference Finals 5 years in a row whether you have a supporting cast in place already or if you build one around him progressively.  He proved that in Cleveland, and he’ll do it anywhere in the East.  I think ownership will have to be included to really lure Lebron, and of course it will be another first in the NBA (if it’s legal in the NBA… is it?). 

Anyways, here’s my theory:  Let’s say the Bulls and Jerry Reinsdorf are desperate to get back to where they were in the 90’s with Jordan.  And let’s say that the Bulls are worth, oh, about $600M estimated (quick search found this value as of 2008).  And let’s say the value of ANY franchise, even the Bulls, will grow at least 50% over his 6 year contract.  That’s a net worth of $900M after 6 years.  And let’s say the Bulls gave Lebron a 10% stake in the team to lure him in, just enough to get his attention but not too much to where you as the owner still have total control.  With the proper valuation figures in place for the negotiation(not just my mba-quality guestimation), Lebron’s net worth can possibly grow an extra $60M in year 1 to $90M in year 6.  So, along with the contract value approaching $180-200M over 6 years, he would in fact be netting closer to $275-300M over that time frame, or an average net-worth of $45-50M a year on the higher end of my valuation theory.

Same should be said about the Knicks, whose value was actually a little bit more in 2008.  They would easily grow 50% over 6 years in their market after a string of playoff appearances, and you could argue they might actually grow way more than 50%.  Those higher end figures could be more on the lower end at that point.

Anyways, again I don’t think it’s legal for a player to own a team while he’s playing, but if it is, and you want the greatest player of his generation for his entire prime and possibly more, this is what I would do if I was an owner.