One year after returning to the Cleveland Cavaliers in one of the biggest free-agent signings in recent NBA history, four-time NBA Most Valuable Player LeBron James has elected to decline the $20.6 million player option he holds for the 2015-16 season and re-enter unrestricted free agency this July, according to an ESPN report.
This was a widely anticipated move, one that many have seen as a simple matter of course ever since James and his representatives negotiated an opt-out clause into the two-year, $42.2 million contract he accepted to rejoin the Cavaliers after spending four seasons with the Miami Heat. Cavaliers general manager David Griffin said during his season-ending news conference that he expected both James and power forward Kevin Love to exercise their rights to tear up the final years of their deals and enter the free-agent market. Love did so earlier this week.
For one thing, with the salary cap projected to rise to $67.1 million for the 2015-16 season, the starting maximum salary next year for a player with as much service time as 12-year veteran James slots in just under $22.1 million. Opting out and signing a new deal, then, allows James to pick up an extra $1.5 million or so for nothing, and would give him a higher starting salary off of which to base the year-over-year raises he'd receive if he were to sign a multi-year deal.
LeBron's not making decisions solely over that comparatively small sum, though; rather, he's making them based on the flexibility that opting out affords.
If James decides to go for a carbon copy of the deal he signed last summer — a two-year pact with the first year fully guaranteed and a player option for the second — he opens up the option of re-entering free agency again in the summer of 2016. That's when the influx of new money from the NBA's massive new nine-year, $24 billion broadcast rights deal will inflate the salary cap to a projected $89 million. The first year of a maximum-salary contract is based on a set percentage of the cap rather than a straight dollar amount, meaning that as the salary cap rises, so does the value of the max; in this case, the spike would bump LeBron's first-year max up to an estimated $29.3 million.
If he wants to keep the good times rolling with one-and-one contracts, James could then opt to once again hit the market in 2017, when the cap's expected to hit an unprecedented $108 million, which would push James' '17-'18 max salary up to a whopping $35.5 million. That would be the highest single-season player salary in NBA history, topping Michael Jordan's $33 million deal to play for the Chicago Bulls during the 1997-98 season. And so on, and so on.
Going year-to-year also allows James to avoid being locked into a long-term deal as the NBA and the National Basketball Players Association ready for their next round of collective bargaining negotiations. Either side can opt out of the existing CBA, signed prior to the 2011-12 season after a lockout that resulted in a substantial lowering in the share of basketball-related income that players receive each year, following the '16-'17 season.
The players union — now led by no-joke-at-all trial lawyer Michele Roberts — is widely expected to exercise that right, opening up negotiations on a slew of financial and system-based issues that could drastically change the nature of the way players' contracts work. Nobody knows quite yet what a brave new-CBA world might look like, but with uncertainty on the horizon, ensuring flexibility seems a prudent approach, which surely hasn't escaped the notice of James ... who, by the way, recently ascended to the No. 2 slot in the union's player hierarchy.
Beyond the dollars and cents, though, James' preference for shorter-term deals that afford him maximum decision-making flexibility each summer puts constant pressure on GM Griffin and Cavaliers owner Dan Gilbert to do everything in their power to keep the team competitive. As I wrote last summer, "What stronger motivator could there be for a front office to make win-now moves than the specter of LeBron deciding to leave again?"
James seems intent on exercising that influence come this summer, according to Chris Haynes of the Northeast Ohio Media Group
This was a widely anticipated move, one that many have seen as a simple matter of course ever since James and his representatives negotiated an opt-out clause into the two-year, $42.2 million contract he accepted to rejoin the Cavaliers after spending four seasons with the Miami Heat. Cavaliers general manager David Griffin said during his season-ending news conference that he expected both James and power forward Kevin Love to exercise their rights to tear up the final years of their deals and enter the free-agent market. Love did so earlier this week.
For one thing, with the salary cap projected to rise to $67.1 million for the 2015-16 season, the starting maximum salary next year for a player with as much service time as 12-year veteran James slots in just under $22.1 million. Opting out and signing a new deal, then, allows James to pick up an extra $1.5 million or so for nothing, and would give him a higher starting salary off of which to base the year-over-year raises he'd receive if he were to sign a multi-year deal.
LeBron's not making decisions solely over that comparatively small sum, though; rather, he's making them based on the flexibility that opting out affords.
If James decides to go for a carbon copy of the deal he signed last summer — a two-year pact with the first year fully guaranteed and a player option for the second — he opens up the option of re-entering free agency again in the summer of 2016. That's when the influx of new money from the NBA's massive new nine-year, $24 billion broadcast rights deal will inflate the salary cap to a projected $89 million. The first year of a maximum-salary contract is based on a set percentage of the cap rather than a straight dollar amount, meaning that as the salary cap rises, so does the value of the max; in this case, the spike would bump LeBron's first-year max up to an estimated $29.3 million.
If he wants to keep the good times rolling with one-and-one contracts, James could then opt to once again hit the market in 2017, when the cap's expected to hit an unprecedented $108 million, which would push James' '17-'18 max salary up to a whopping $35.5 million. That would be the highest single-season player salary in NBA history, topping Michael Jordan's $33 million deal to play for the Chicago Bulls during the 1997-98 season. And so on, and so on.
Going year-to-year also allows James to avoid being locked into a long-term deal as the NBA and the National Basketball Players Association ready for their next round of collective bargaining negotiations. Either side can opt out of the existing CBA, signed prior to the 2011-12 season after a lockout that resulted in a substantial lowering in the share of basketball-related income that players receive each year, following the '16-'17 season.
The players union — now led by no-joke-at-all trial lawyer Michele Roberts — is widely expected to exercise that right, opening up negotiations on a slew of financial and system-based issues that could drastically change the nature of the way players' contracts work. Nobody knows quite yet what a brave new-CBA world might look like, but with uncertainty on the horizon, ensuring flexibility seems a prudent approach, which surely hasn't escaped the notice of James ... who, by the way, recently ascended to the No. 2 slot in the union's player hierarchy.
Beyond the dollars and cents, though, James' preference for shorter-term deals that afford him maximum decision-making flexibility each summer puts constant pressure on GM Griffin and Cavaliers owner Dan Gilbert to do everything in their power to keep the team competitive. As I wrote last summer, "What stronger motivator could there be for a front office to make win-now moves than the specter of LeBron deciding to leave again?"
James seems intent on exercising that influence come this summer, according to Chris Haynes of the Northeast Ohio Media Group
