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LeBron James is underpaid

Sep 3, 2010, 10:33 AM EST

LeBron_Heat.jpgWhile LeBron James was still deciding where to take his talents, a fun bar stool/message board discussion was how much would LeBron be offered in a non-capped open market? $30 million a year? $40 million?

But the market is capped, and LeBron will start making $14.5 million this season. Which is a real bargain, according to what Ian Thompson of Sports Illustrated was told.

“I’m projecting for next year he’ll be worth $31 million,” said Rich Steinlauf, a New York-based analyst who has been studying the NBA for three decades.

Steinlauf’s system looks at the impact of a player to determine a worth based on his share of a standard team payroll. Which leads to an interesting conclusion.

Miami’s off-season coup of signing James, Wade and Chris Bosh has given the Heat the league’s most cost-efficient payroll, according to Steinlauf. While some will question the $18.3 million average salary Bosh will earn over the next six years, Steinlauf insists that the Heat are paying him what he’s worth.

Steinlauf is right. I don’t love his system, but he is right about the finances.

Since the dawn of professional sports in America, it is largely the stars that sell the team and make the money. That is particularly true in basketball. The money that a LeBron James or Kobe Bryant or Dirk Nowitzki generate in ticket sales (and with that concessions and parking), in uniform sales, the boost they provide in marketing far outweigh what they are paid. Put simply, LeBron is going to bring in a lot more money to the Heat than what he gets in salary.

Where that table turns is the mid-level guys. While Kobe is generating the income in Los Angeles, Lamar Odom and Luke Walton and even Andrew Bynum are the beneficiaries, not really generating what they make. It’s that way on every team. Really, in every sport.

If you want to make the argument that they are all overpaid because they are playing a sport for a living and we should be paying teachers and firefighters more, then go ahead. But that is a cultural argument about the value of entertainment in our culture and our economic structure. Our top entertainers make a lot of money, but they generate a lot of money and we live in a capitalistic society where you (basically) get paid for what you generate. Fair or not, just or not, that is the reality.

So yes, LeBron James is underpaid.

  1. Sguy2130 - Sep 3, 2010 at 11:56 AM

    An MVP Lebron James with a team designed around him is underpaid. A Lebron James who is “taking my talents to South Beach” is not underpaid.

  2. Lion Woods - Sep 3, 2010 at 12:38 PM

    $14.5 million? Wow, it would take me 350 years to make $14.5 million at my current salary of $43,000 per year. So should I feel bad that Lebron is “underpaid”. Well, society as a whole is off balance to say the lease. Why are consumers charged so much for entertainment? The owners charge far too much for tickets, concessions and the like, thus the Players make far too much money. This world is a trip… and if Lebron wants to demand a renogotiation of his weak contract, then I’ll back him up .0001 percent.

  3. YouGotThatRight - Sep 3, 2010 at 12:51 PM

    And the LION Roars. I Love that post.

  4. Jason - Sep 3, 2010 at 12:59 PM

    Lion, the moron. Why are consumers charged so much for entertainment?
    Since you have that mentality, ban yourself from watching anymore NBA
    games on tv.

  5. Lion Woods - Sep 3, 2010 at 1:18 PM

    Look Jason… overpaid, overpriced is the name of the game. I usually get free tickets to football, hoops and baseball games so I don’t pay which is good because I would not want to pay those prices to any sporting event. Although I would pay whatever price your moms is asking.

  6. Skids - Sep 3, 2010 at 2:14 PM

    No, he is not underpaid. This is typical of the union way of thinking. The owner gets all the risk while the employee gets over paid to do his job.
    That mentality is what is wrong in AMerica these days. Business is tired of assuming all the risk, while unions sit back and act entitled to everything.

  7. Michael - Sep 3, 2010 at 3:48 PM

    Actually studies have shown that ‘star’ players primarily increase ticket sales for away games. Home gate revenues increase due to team success.
    http://jse.sagepub.com/content/5/1/33.abstract
    A lot of ‘mid level guys’ are really very productive players who add significantly to their teams win total. Lamar Odom for example is a highly productive player. The NBA however tends to reward scorers at a disproportionate rate. Mainly due to misconceptions about ‘star’ players like the above.

  8. Yosef - Sep 3, 2010 at 4:17 PM

    For a second I was thinking, “Holy crap, this guy is being articulate and reasonable when backing up his argument!” Then you threw in that last line and I immediately stopped caring about anything you had to say.

  9. cygnus x-1 - Sep 3, 2010 at 7:04 PM

    how much money did these guys make playing for thier former teams?how much did they make in endorsements?how much are they going to make off endorsements in miami?something tells me they will be able to get by on “only” 14 million a year.of all the stories and reasons why they decided to play together nothing is more sicking than to read about what a sacrifice they made to play together.how much of a sacrifice is that for somebody that rich to make?just stop with this nonsense.

  10. Cordae - Sep 3, 2010 at 8:26 PM

    Dude, with all due respect………stfu =/
    Youre throwing your emotions around like LeBron or the other two broke up with you personally. “Sickening” wow…
    Anyways, as much as you all hate him and hate to admit it, he is in fact underpaid. You generate hundreds of millions of dollars to a city, and get paid less than half, you ARE underpaid. Dont get your panties in a bunch because you’re a “thousandaire”. Hell I am too! But thats not clouding my judgement, more importantly the truth. Despite how many millions he makes. So throw your tampons aside and look at the BIGGER picture. The man generates a s**tload of money and gets WAY less than half. Why do you think danny was so pissed to see him go? Damn sure wasnt emotions……….you got it, the DOUGH!

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