LeBron James Will be a Cavalier Until at Least 2010Wednesday was signing day in the NBA, which means that many of the trades and contract deals that have been speculated about became official. The top story without question is that LeBron James signed a contract extension with the Cleveland Cavaliers for three years, with a player option for the fourth year. The deal that he signed as a rookie ends after the 2006-07 season, so James will be a Cavalier until at least 2010. The coverage of this story has been fascinating and amusing. When Dwyane Wade and Carmelo Anthony immediately announced that they planned to re-sign with their teams but James was silent, speculation ran rampant about whether James planned to leave Cleveland early for greener pastures. Then, someone came out with the "scoop" that James would stay in Cleveland after all. Next, a "bombshell" dropped when word leaked out that James would not sign a five year extension but instead agree to a three year extension; supposedly, James' decision influenced Wade to make a similar move.
Some commentators are acting as if James and his agent discovered some secret loophole in the collective bargaining agreement but if they would have been more concerned about getting the story right as opposed to getting it "first," James' decision would not seem so mysterious. Tim Duncan signed the exact same kind of deal in 2000. There are two good reasons for not signing a five year deal: one, the player is not stuck with the team if the organization fails to make the right moves to contend for a championship; two, the player will have the opportunity to become an unrestricted free agent when he will presumably be in the absolute prime of his career. Scottie Pippen opted for the security of a long term deal early in his career and spent many years resenting how underpaid he was when player salaries exploded but the Chicago Bulls refused to renogiate his deal. Michael Jordan was similarly underpaid but made up the difference with his tremendous endorsement deals. Both he and Pippen received large contracts at the end of their careers that at least somewhat compensated for the seasons in which they did not receive full market value, so in the end they obtained both security and a big payday.
What nobody is talking about is the one potential downside of James signing a three year deal: an injury or off-court problem that diminishes James' value. Everyone assumes that James will be getting a huge payday with his next deal in three or four years but in the meantime he is giving up the option to have two more years of guaranteed salary, which amounts to roughly $30 million. Remember Ralph Sampson? He won Rookie of the Year in 1984 and All-Star MVP in 1985. In 1986 he and fellow "Twin Tower" Hakeem Olajuwon led the Houston Rockets to the NBA Finals. At that point, Sampson certainly would have been considered worthy of a max deal if the current system had been in place then. In 1987 he suffered the first in a series of injuries that derailed his career. James won Rookie of the Year in 2004 and the All-Star MVP in 2006. He certainly seems destined to become one of the game's all-time greats and he has already banked tons of endorsement money--but the future is promised to no one, not even the self proclaimed "Chosen One." So, opting for a three year deal may turn out to be a good move, but--contrary to what you are reading and hearing--it is neither precedent setting, nor is it without risk.
posted by David Friedman @ 4:29 AM