Cleveland.com has an interesting look at the details of LeBron James's contract with the Cavaliers, and why it's a certainty that James is going to decline his player option this summer, and again the summer after that. It's flexibility, sure, but it's also tens of millions of dollars.
James is actually on a one-year deal, with a player option for next season. Under almost any other circumstances, that's insane: a max player taking anything less than a max contract? But LeBron, obviously, doesn't lack job security. And in two years, two things will happen that make it worth his while to wait: James will qualify for his "Early Bird" Rights, and the NBA will grow tumescent with TV money.
So here's how it works, with all figures estimated as best as possible under the NBA's byzantine salary structures:
• James is making $20.64 million this year, and has an option for 2015-16 worth $21.57 million, both max figures. But if he declines his player option and signs another one-year deal (with an option for 2016-17), he can make roughly $23 million next season.
• Expect James to then opt out of that deal in the summer of 2016, when the NBA's nine-year, $24 billion media-rights deal kicks in. That'll be the offseason James signs a four-year deal, and it'll be a big one—the salary cap will rise, and with it the amount of money max players can receive.
• James could sign that four-year deal with anyone, but if it's with Cleveland—and there's no reason right now to think it won't be—he'll be an "early qualifying veteran free agent," better known as an "Early Bird." The upshot is that if he's re-signed by the team that's had him for two full seasons, that team can exceed its own cap to ink him, and offer significant annual raises over the length of his long-term contract.
Business Insider, with a generous estimate of what the cap will rise to once the new TV deal kicks in, calculated that James stands to earn $43.5 million more on a four-year deal signed in 2016 over one signed this past summer. Even for a very wealthy man, that's a lot of money.
Cavs fans "shouldn't be nervous" over his year-by-year contracts, James assured them when he signed. "It's a business decision." Totally true! It also gives him the chance to get away if things go horribly wrong over the next year-plus, which seems unlikely. But there's one final quirk to James's contract which at least hints that he's got his eye on the tail end of his career: he's got a trade kicker.
The kicker would pay James, if he's traded, an additional 15 percent of what's left on his contract. It wouldn't apply this year, because of James's one-year max, and couldn't possibly apply until the waning years of a long-term deal—but getting it in print now makes it more likely to be grandfathered in later. All of which adds up to more negotiating power for James, and more certainty that he'll get to decide where he finishes his career.