LeBron James is a force of nature… both on and off the basketball court. Everyone knows he’s a 4-time NBA MVP. Everyone knows he’s a 3-time Champion (most recently leading the Cleveland Cavaliers to their first title in 52 years). Everyone knows he just came back from a 3-1 deficit in the Finals. Everyone knows that stuff.
But do you know how business savvy LeBron is?
Some people remember that LeBron brought Beats by Dre to the forefront in the Olympics. Some will talk about his endorsements like that lifetime Nike deal he signed. And still more will say he makes a ridiculous salary playing basketball.
And yet if you take a step back and really look at what LeBron is doing, you’ll see.
He’s building an empire.
The LeBron James brand empire.
Earning an estimated $77 million in 2016 according to Forbes.
Let’s really examine what LeBron is doing and how we can learn from his brilliant (but not necessarily new) approach to wealth and entrepreneurship.
LeBron James Business Empire
4 Keys We Can Learn From LeBron James About Wealth And Entrepreneurship
1. Own It Or Take Equity When You Can
LeBron learned early on in his career that just being a spokesman and receiving a paycheck wasn’t enough. He knew that eventually, the cash cow would die off and he’d need something else.
Hence his new obsession with getting equity and ownership in many of his deals. He doesn’t want to just use his brand… He wants to own other brands too.
That’s why LeBron left the safety of a player’s agent and started his own firm with three friends. His marketing firm is LRMR and it controls everything for LeBron and his image. LeBron owns his image. Period. He wasn’t going to settle for just being a great basketball player and letting someone else handle his money. We’ve seen big players make that mistake a few times (like Tim Duncan).
Take one of James’ newest deals for example.
LeBron was formerly an ambassador for McDonald’s as have many famous athletes have been in the past. However, he recenrtly left McDonald’s to invest in an up-and-coming pizza chain called Blaze Pizza . Rumor is that LeBron owns more than 10% of the company right now.
In addition to the ownership stake, LeBron locked in the franchise rights for the cities of Miami and Chicago already. And they have already built 11 between those cities.
Yeah… that’s what we call a win-win!
Did you know LeBron owns a TV production company? Yup… it’s called SpringHill Entertainment. It’s already gotten deals with Starz, Showtime, Disney and NBC. And it just inked a new deal with Warner Bros. to produce new shows.
What about his actual profession of basketball?
Yeah LeBron likes to have control there too. He was recently voted the Vice President of the NBA Player’s Union. Those are the ones who negotiate the contracts for players. And it’s his good friend Chris Paul as the President. You know those two are going to negotiate well on behalf of all players.
LeBron’s past deals are somewhat familiar to people. He owned a piece of Beat by Dre headphones before they sold to Apple. Rumors are that LeBron made about $30 million in cash and stock from that deal.
Another deal was with biking company Cannondale in 2007. He invested an undisclosed amount in the company after doing extensive research. LeBron also happens to love biking which probably helped him choose that arena. Apparently LeBron cashed out at 4 times his initial investment because of such great growth Cannondale had.
Lastly, you probably heard that LeBron owns a small stake in the Liverpool soccer team. It was part of a deal LRMR and Fenway Sports Marketing agreed to in order to share marketing and sponsorship opportunities.
LeBron now has expanded into other sports… And it likely won’t stop there
2. Diversify Through All Avenues Possible
LeBron isn’t just about owning because some situations call for a different approach. LeBron isn’t going to ignore the money available for his name to be put on a product. And those are his endorsements.
LeBron endorses a multitude of companies and products.
Technically, he still endorses for Beats. He’s also endorsed by Nike (obviously), Coca-Cola, Kia, Samsung, and more.
Not including that new lifetime Nike deal, LeBron’s estimated earnings from endorsements is around $54 million according to Forbes.
Now if you add in the additional money that secret lifetime deal is worth, it adds another $10-15 million per year.
Oh and don’t forget he is also a pretty good basketball player and makes money from that too. In the 2015-2016 season, LeBron made just under $23 million from the Cavaliers.
That salary is going to jump this upcoming season to an estimated $27 million, and will likely jump again the following season well over $30 million per year.
All together, LeBron could be looking at $100 million per year in just salary and endorsements.
And that’s not including all those ownership investments….
LeBron has no shortage of friends both on and off the court. But let’s focus on those off the court right now.
LeBron James is casual friends with many famous businessmen like Warren Buffet, Bill Gates, and Mexican billionaire Carlos Slim. That’s three billionaires in one man’s phone.
Then you consider some other friends of his like Jay-Z and Dr. Dre and you can see a trend that LeBron hangs out with some insanely successful people.
We’ve heard it plenty of times… You become like the 5 people you hang around most. Many self-help experts like Jim Rohn have made this statement (or a similar statement). LeBron is doing a fantastic job of surrounding himself with successful businessmen and women.
And because LeBron is so intelligent, those friends enjoy being around him. Buffet has said on several occasions that he is impressed by LeBron’s business savvy.
That’s quite the compliment from one of the world’s richest men.
4. Endorse Something You Value
If I had to pick one key that I admire the most about LeBron, it’s this one: LeBron only signs with companies that he believes in. Only ones he feels will align with his vision and brand.
That is incredible given how he’s one of the richest athletes each year.
According to his financial adviser Paul Wachter, LeBron has turned down big endorsement checks because he didn’t feel it was right for him.
His list of endorsements is impressive, but some are surprising.
It took LeBron 12 seasons to finally endorse a car company. That is a fairly common athlete endorsement (think Shaq in that Buick commercial) and yet LeBron signed with Kia.
Yeah… Kia… Who could’ve seen that coming?
But LeBron was given one to test from his business partner and liked the ride. He then met with the company and heard their vision. Apparently, LeBron was so impressed that he signed on.
Here’s the bottom line.
LeBron has a vision for his life after basketball. And any endorsement, sponsorship, or ownership has to fit in with that vision. Or it’s out. Period.
You certainly can respect a man so dedicated to a vision. At least I do.
The Lessons Learned
Hopefully this gives you a glimpse into LeBron beyond the basketball court. He’s currently reported as the 4th richest NBA player in history behind Michael Jordan, Magic Johnson, Kobe Bryant and Shaquille O’Neal. Not bad given all 4 above him are Hall Of Fame Players and have been retired for quite some time (except Kobe).
What we said earlier about these keys not being “new” is absolutely correct. These are nothing ground-breaking as they have been duplicated numerous times. It just goes to prove that success comes from the same principles no matter what the arena.
Hope you enjoyed the article and are ready to go tackle your next great challenge!