Just before the Fourth of July, LeBron James signed a four-year $154 million contract with the Los Angeles Lakers.
Fans may think it outlandish, but the package confirms that James has learned key lessons in liberty and economics.
The $154 million deal was not a mandate of government, the NBA or any athletic organization. The contract is a voluntary arrangement between the parties and represents what the Lakers want to pay the three-time NBA champion.
The Lakers will pay that kind of money because people will pay big money to watch LeBron James play. They will not pay to watch something anybody can do, and like many athletes, James has taken that into account.
Though exceptionally gifted, he constantly strives to make himself a better player. He wont talk about his off-season training regime, but it would likely challenge a Navy SEAL. Thats why, at 33 years old, James shows no sign of slowing down.
LeBron boosts his value by elevating his game beyond most of his NBA peers. Nobody can make him go anywhere on the court he doesnt want to go, and it would be hard to find a player who gets more chase-down blocks. Fans dont want to see mediocre play, and by no means do they want to watch league bureaucrats. The newly minted Laker understands that dynamic.
Already a star in his teens, LeBron James chose not to play college basketball. He knew the NCAA prohibits players from earning any money and pays them in kind, with scholarships. As a college player, LeBron would have had no money in his pocket, but he would have seen his jersey on sale for a hefty price. While hailing the virtues of amateurism, the NCAA would bag millions for the television rights.
By its own accounting, the NCAA signed media deals with CBS ranging from the 1982 three-year $49.9 million to a $6 billion for 11 years in 2002. An 11-year 2002 deal with ESPN brought the NCAA $200 million and the 2010 CBS/Turner deal is good for $10.8 billion over 14 years.
NCAA president Mark Emmert bags $1.9 million a year and in 2014 Pac-12 commissioner Larry Scott was paid $3.4 million. Commissioners of the Big Ten and Big 12 are also doing well at $2.3 million and $3.1 million, respectively. That is not exactly chump change for an industry fueled by unpaid athletes.
As LeBron James observes, the five-star athletes arent brought on campus to get an education. College bosses bring them aboard to make the Final Four, win a national championship, and rake in the dollars.
So LeBron James is hardly out of bounds with his charges of NCAA corruption, but hes not just a complainer. He would like to see something like baseballs farm-team system or European club teams. As he knows, Slovenian star Luka Doncic was earning big money for Real Madrid since he was 16.
Meanwhile, LeBron James also won three Olympic Medals, including two golds, for the United States. Fans love a winner and LeBron knew that would also enhance his value. His off-court conduct has always been exemplary and people will pay to watch him play.
Thats how LeBron James earned his $154 million deal with the Lakers. Let freedom ring.
|K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and author of the Independent Briefing, Cross-Currents in California Water: A Case Study of Bureaucracy Versus Tradable, Private Water Rights.|