11 in a row, Bill Russell rings / Y’all think Michael Jordan bad? / I got five more rings than Michael Jordan had! -- Jay-Z
One year after LeBron James famously speculated about how many championships he could win in Miami, the owners locked out the players. The lockout wasn’t just the latest in a long line of cynical money grabs, it was also an attempt to wring back control of the NBA from the league’s stars. The owners opened negotiations by offering a hard cap that would have forced the Heat to scuttle the Big Three immediately; they settled for steep new luxury tax penalties that would have the same effect over a longer time frame.
Even the most free-spending teams have been cowed by the new penalties. Habitual line-steppers like the Mavericks wouldn’t just pay steeper fines under the new system, they’d lose the ability to improve their roster too. From Tyson Chandler to James Harden and Rudy Gay, some of the best teams in the NBA have already jettisoned talent with one eye on the impending tax. Many believe the Heat will have to bite the same bullet in the summer of 2014, when LeBron, Dwyane Wade and Chris Bosh can all opt out of their current contracts.
LeBron caused a stir this weekend when he said his current deal is a bargain, but he’s absolutely right. He makes $17.545 million this season from the Heat/NBA, which sounds like a lot until you consider that he’s the face of an industry that generates billions of dollars in annual revenue. The bubble in televised sports is revolutionizing the economics of the game, but none of those profits will trickle down to LeBron. Mikhail Prokhorov spent $200 million on the Nets with the goal of making them worth $1 billion. How much would LeBron be worth to him in an open market? A lot more than the max salary.
Over the course of his career, the max will cost LeBron hundreds of millions of dollars. It dramatically changes his incentives in free agency as well. In the summer of 2010, teams didn’t woo LeBron based on how much money they could give him, but on where he would feel most comfortable both on and off the court. Unlike Albert Pujols or Alex Rodriguez, LeBron never had to choose between the most money and the best fit in free agency. That’s how he ended up playing in South Beach with two future Hall of Famers.
The biggest stars in basketball make more money in endorsements than they do in salary. LeBron made $40 million last year from companies like Nike, State Farm, McDonald’s, Samsung and Coca-Cola. From a cash-flow perspective, LeBron's salary with the NBA is a loss-leader that brings customers in the door in the same way that Apple uses $1 iTunes songs to sell iPhones, iPods and iPads. LeBron’s brand depends on him winning championships, so taking less upfront to play on an elite team ultimately makes him more money on the back end.
In a similar way, Jay-Z, his mentor and close friend, made more money selling clothes than he ever did rapping. The central principle of Jay’s career was not relinquishing control of his career. He didn’t have to listen to record labels about what music he should put out; he owned his own label. And just like LeBron chooses the players he wants on his team, Jay has free reign to pick and choose the producers and rappers he wants on his albums.
The results speak for themselves. In LeBron’s first two seasons in Miami, the Heat won 71% of their regular season games and 70% of their playoff games. In playoff games where all three of their stars are in the starting line-up, they’re 23-7. For all of their struggles this season, Miami is still the No. 1 seed out East. Come playoff time, “turning on the switch” may be as simple as increasing LeBron’s minutes. Last season, LeBron averaged 38 minutes in the regular season and 43 in the playoffs, including going more than 47 three times against the Celtics in the ECF.
Looking over the landscape of the NBA, it’s hard not to install them as the favorites to win the next two titles. The last three teams to beat LeBron in a seven-game series -- the Celtics, Magic and Mavericks -- no longer exist. It’s no coincidence that all three were built around a dominant seven-footer. Shaquille O'Neal, Tim Duncan, Kevin Garnett and Dirk Nowitzki dominated the 2000’s, but none of the great seven-footers in LeBron’s generation has been able to stay healthy. In a league becoming more perimeter-oriented by the year, it will be an uphill battle for any team built from the outside-in to defeat the Heat.
When LeBron opts out in the summer of 2014, he will be the most coveted free agent in NBA history. At that point, regardless of how many titles they win in the interim, Miami will be an old, capped-out team without many ways to improve. Mario Chalmers will be their only rotation player under the age of 30. Most importantly, Wade will be 33, an age where guards without great jump-shots typically begin to decline. That’s why many think LeBron will jump for greener pastures, either in Los Angeles or back home in Cleveland.
However, the same logic that applied in 2010 will apply double in 2014. How much money LeBron makes in his next contract is immaterial. He has the 13th highest salary in the NBA, but he’s still the highest-paid basketball player in the world. If he made the league minimum, he would still make substantially more than everyone except Kobe. Two years from now, when he’s deciding on where he’ll play for the rest of his prime, the only thing that’s going to matter is whether his team can contend for championships. And the only way for LeBron to control that is to take less money than he took in 2010.
From that point of view, why leave? Miami is the ideal place to recruit other great players; there’s no state income tax, a championship organization in place and South Beach. If LeBron takes less money in 2014, Wade and Bosh will have to fall in line or they’ll have to find somewhere else to play. Either way, as long as he leaves enough money on the table, he’ll be able to find new Super Friends if his current ones start looking long in the tooth. In 2015, for example, LaMarcus Aldridge and Kevin Love will be on the market.
Few people talk about “not six, not seven, not eight” anymore, but it may not have been an idle boast. LeBron has the chance to dominate the 2010’s as thoroughly as Bill Russell did the 1960’s. Since his unrivaled commercial stature gives him the freedom to take less money in salary than his peers, the luxury tax will continue to force his rivals to make the tough decisions the Heat won't have to. Dan Gilbert, Robert Sarver and the rest are out here playing checkers; LeBron and William Wesley are playing chess.