SBD/July 14, 2014/Franchises

LeBron Goes Home: James Keeps Options Open By Signing A Two-Year Deal

Maverick Carter (l) and James (r) aim to restore their hometown's image
LeBron James over the weekend officially signed a two-year, $42.1M deal with the Cavaliers, with the "goal of re-signing with the Cavs" before the '16-17 season, according to sources cited by Brian Windhorst of ESPN.com. That is when a new league-wide TV deal is "expected to create a large jump in value of the maximum contract." Sources said that James as part of the deal will "have an option to become a free agent next summer but is fully committed to the Cavs long term." The salary cap -- depending on how the NBA's new TV contracts are put together -- is "projected to leap to as high" as $80M in '16, well higher than its current value of $63M. There also is "uncertainty" with the current CBA in '17, when the league or players can opt out, another reason James "wanted to keep his long-term options open when it comes to the structure of his contract" (ESPN.com, 7/12). In Cleveland, Chris Fedor wrote James "signed a shorter deal for business reasons." With the NBA "soon negotiating new television contracts" for the '16-17 season, James "will be positioned to capitalize." He "will only be 31 at the time, and the TV deal is expected to lead to a bump" in the '16 salary cap (CLEVELAND.com, 7/12). USA TODAY's Jeff Zillgitt noted the salary cap, on which "the value of max deals are based, is expected to increase" regardless of the TV deal. James "gives himself the ability to take advantage of that" with his player option (USATODAY.com, 7/12).

KEEPING OPTIONS OPEN: In Cleveland, Terry Pluto noted it would "not be a shock if James opted out of his deal at the end of the season, and signed another 2-year contract this like this one -- only the starting point" would be an estimated $22M (Cleveland PLAIN DEALER, 7/13). Also in Cleveland, Bud Shaw noted James has "always sought flexibility in his contracts." The same desire "that resulted in opting out of his Miami deal will probably steer this contract, too." It "makes too much business sense" (CLEVELAND.com, 7/11). In Akron, Jason Lloyd wrote Cavaliers fans certainly "may fret over James’ contract structure, and it’s inevitable New York media will at some point speculate about James joining the Knicks and Carmelo Anthony next summer, when the Knicks will have cap space" to acquire James. But his letter on SI.com "made it clear he had no intention of going anywhere else and is committed to the Cavs for the long term" (AKRON BEACON JOURNAL, 7/13). In San Jose, Tim Kawakami wrote James is "smart enough -- and powerful enough -- to leave himself at least a few escape hatches" in his contract. He "almost certainly has every intention to stay with the Cavaliers forever," as it would look "foolish for him to consider leaving again after coming home." But James "can be a free agent next summer, which puts immense pressure" on Cavaliers Owner Dan Gilbert and his staff "to upgrade the franchise immediately" (SAN JOSE MERCURY NEWS, 7/13).

THE LUXURY OF KNOWING: In Ohio, Bob Finnan wrote the Cavaliers will "likely have to pay the luxury tax," beginning with the '15-16 season. That is when G Kyrie Irving's max contract "will kick in." The "exact figure of his max deal" has not been disclosed, but "it could be for as much" as 25-30% of the team's salary cap. The Cavaliers will have more than $40M "tied up in James and Irving’s contracts." The Cavaliers "haven’t paid the tax since James was on the team the last time." Cavaliers for the '15-16 season (Willoughby NEWS-HERALD, 7/13).

EMOTIONAL INVESTMENT: The PLAIN DEALER's Shaw wrote James is "even more emotionally invested here now and that's a good thing for the city, the team and the Cavaliers' organization." James "someday wants to own and operate a NBA team," and "last time he looked, there was one still doing business 45 minutes from his birthplace." Shaw: "Emotional and physical investment now, financial to come for James?" It will "be fascinating to watch how the Cavs handle things with James given Gilbert's stated desire post-James to build with 'team' in mind." Shaw: "How much say will James have? How much free rein?" (CLEVELAND.com, 7/12). Also in Cleveland, Phillip Morris wrote James in his announcement expressed an interest in "carving out a leadership stake in the community and using his talents to help make Northeast Ohio a better, more inviting and attractive place." Morris: "That’s promising." James "clearly sees himself as an emerging mentor both on and off the court." He is "without a doubt" also a "powerful antidote to the region's brain drain and chronic self-doubt" (CLEVELAND.com, 7/11). In N.Y., William Rhoden wrote James' decision to return to Cleveland is an "intriguing, emotional gambit." James is "either coldly pragmatic or more of an altruist than I could have imagined" (N.Y. TIMES, 7/13).
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Cleveland Cavaliers, NBA, Franchises

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