LeBron James Is Underpaid By $10 Million Per Year According To Study
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Kame
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LeBron James is arguably the best player in the NBA. His salary is $17.5 million a year. He's worth much, much more.
"He's getting hosed," says Kevin Grier, an economist from the University of Oklahoma.
James used to play for the Cleveland Cavaliers. When he left, the value of the team fell by tens of millions of dollars — and the value of his new team, the Miami Heat, rose by tens of millions. The economists I talked to said James should be making closer to $40 million a year.
James is profoundly underpaid because there is nothing resembling a free market for NBA players. And, weirdly, this is good for James. (It's also good for weaker players, and for team owners.)
There's a "salary cap" in the NBA, which limits the total amount each team can pay in salaries. This reduces the amount top players make, and boosts the salaries of mediocre players.
On top of that, the NBA draft means that rookies have to play for whatever team drafts them (or not play in the NBA at all). And there's a limit on what rookies can be paid.
Imagine if other fields were set up this way. You're the best young software engineer at MIT, and instead of getting hired for an insane starting salary by Google, you just put your name in a pool with other engineers. The worst companies in America draw random numbers, and you get a letter saying you've been hired to work in the IT department at Best Buy.
Now all these rules are all laid out in the collective bargaining agreement between the owners and the players. Why would the players want this system? Because most players are not LeBron James.
"The union votes on the contract by majority rule," Grier says. "The guy in the middle is the crucial voter."
The salary cap means that some of the money that would otherwise go to James goes to the guy in the middle.
Another reason James' teammates vote to hose him: They want the league to be competitive.
The salary cap makes it impossible for rich teams to hire all the superstars. That means even teams in smaller markets have a shot at greatness, which draws more fans to support those teams. More fans means more revenue for the league as a whole — and that means bigger paychecks for the players.
And this, Grier says, is why Lebron James has a reason to support the system. Playing in a more competitive league helps him make more money in other ways.
"If he was a three-time Olympic decathlon champion, he would in no way be making nearly the amount of endorsement money that he's making," Grier says.
To earn those tens of millions of endorsement dollars, James needs passionate fans of professional basketball. For that to happen, he needs good teams to play against, even if it's costing him over $20 million a year.
http://www.npr.org/blogs/money/2013/01/25/170176590/at-17-5-million-a-year-lebron-james-is-underpaid
http://www.businessinsider.com/lebron-james-is-underpaid-by-nearly-10-million-per-year-sports-chart-of-the-day-2013-1#ixzz2J1QpT4nF
"He's getting hosed," says Kevin Grier, an economist from the University of Oklahoma.
James used to play for the Cleveland Cavaliers. When he left, the value of the team fell by tens of millions of dollars — and the value of his new team, the Miami Heat, rose by tens of millions. The economists I talked to said James should be making closer to $40 million a year.
James is profoundly underpaid because there is nothing resembling a free market for NBA players. And, weirdly, this is good for James. (It's also good for weaker players, and for team owners.)
There's a "salary cap" in the NBA, which limits the total amount each team can pay in salaries. This reduces the amount top players make, and boosts the salaries of mediocre players.
On top of that, the NBA draft means that rookies have to play for whatever team drafts them (or not play in the NBA at all). And there's a limit on what rookies can be paid.
Imagine if other fields were set up this way. You're the best young software engineer at MIT, and instead of getting hired for an insane starting salary by Google, you just put your name in a pool with other engineers. The worst companies in America draw random numbers, and you get a letter saying you've been hired to work in the IT department at Best Buy.
Now all these rules are all laid out in the collective bargaining agreement between the owners and the players. Why would the players want this system? Because most players are not LeBron James.
"The union votes on the contract by majority rule," Grier says. "The guy in the middle is the crucial voter."
The salary cap means that some of the money that would otherwise go to James goes to the guy in the middle.
Another reason James' teammates vote to hose him: They want the league to be competitive.
The salary cap makes it impossible for rich teams to hire all the superstars. That means even teams in smaller markets have a shot at greatness, which draws more fans to support those teams. More fans means more revenue for the league as a whole — and that means bigger paychecks for the players.
And this, Grier says, is why Lebron James has a reason to support the system. Playing in a more competitive league helps him make more money in other ways.
"If he was a three-time Olympic decathlon champion, he would in no way be making nearly the amount of endorsement money that he's making," Grier says.
To earn those tens of millions of endorsement dollars, James needs passionate fans of professional basketball. For that to happen, he needs good teams to play against, even if it's costing him over $20 million a year.
http://www.npr.org/blogs/money/2013/01/25/170176590/at-17-5-million-a-year-lebron-james-is-underpaid
http://www.businessinsider.com/lebron-james-is-underpaid-by-nearly-10-million-per-year-sports-chart-of-the-day-2013-1#ixzz2J1QpT4nF
Comments
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lmaoo at James Jones making 0 dollars if paid based off his production
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Interesting...
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Wade and Bosh make more than they actually should based of their production
Allen should make about 6 mill more than he got
This is all without salary caps btw -
? outta here.
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shane makes the same amount he should make
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Which is why i think he will opt out come 2014. He sacrificed for 4 years, time to get paid.
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Derrick rose will make more than lebron next season.The nba salary structure is all fucced up
They need to raise the cap another 4-5 mil -
The pro atheletes are some dummies accepting a Salary Cap at any point. The owners make three times the amount they originally invest and that's on a bumass team like the Kings. This crying poor thing is ? .
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all that ? gets one word......."duh".
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This would hold true with most star athletes. If you really tallied up the profits in some major sports, the ? would make you think slavery was still cracking.
Then you have overlooked profits like net worth of the team, the future profits over the next 50 years from what one player did in 5-10 years etc.
Bulls organization still eating off of what Jordan did, cowboys stadium was built on the backs of Emmitt/Irvin/Aikman, etc, etc.
That's why I don't get mad at players holding out anymore.
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Aside from Lebron and Ray Allen... Chalmers is puttin in that work!
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Lebron makes too much in endorsements to care about this. In reality his income ? on Chris Bosh's.
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foh. he plays basketball for a living. he's overpaid by about 17.5 million
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foh. he plays basketball for a living. he's overpaid by about 17.5 million
No...he's the best basketball player on the planet, out of some 5 billion people he is the best. Thats why he's not overpaid 17.5 million dollars. -
1st world problems.......
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I know
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foh. he plays basketball for a living. he's overpaid by about 17.5 million
Yet what about the owner's & organizations, that make billions off of the "Lebron's" ??????? -
None of these ? deserve millions. Anybody else just see Van Gundy on ESPN saying that Dwight can be the most dominant center of this era, he just has to be engaged and want it? All that money and you can't even pay attention to your principal job function?
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there is nothing about them. either apply that "they making money off them" logic to all the players in all the sports or don't do it at all. -
This notion that pro athletes are overpaid is just dumb. The reason that Lebron, Pujols, etc get paid more than the UPS ? is because they are literally one in a million. Any ? can deliver packages, not every ? can do what these guys can do in their sport...thats why they are paid the way they are. Its no different than ANY other industry or profession.
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This notion that pro athletes are overpaid is just dumb. The reason that Lebron, Pujols, etc get paid more than the UPS ? is because they are literally one in a million. Any ? can deliver packages, not every ? can do what these guys can do in their sport...thats why they are paid the way they are. Its no different than ANY other industry or profession.
fixed for ya homie
they get paid like that cause they generate money. not because their one in a million. saying that would be like
saying lebron is the only ? who can dribble a ball, pujols the only ? who can swing a stick etc.
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IamtheVILLE wrote: »This notion that pro athletes are overpaid is just dumb. The reason that Lebron, Pujols, etc get paid more than the UPS ? is because they are literally one in a million. Any ? can deliver packages, not every ? can do what these guys can do in their sport...thats why they are paid the way they are. Its no different than ANY other industry or profession.
fixed for ya homie
they get paid like that cause they generate money. not because their one in a million. saying that would be like
saying lebron is the only ? who can dribble a ball, pujols the only ? who can swing a stick etc.
WTF?? You seriously believe that Lebron isn't one in a million, ? that billion?? You going to sit there and tell me that there are a million ? that can hit the ball the way Pujols does? Or can shoot a -18 at Agusta the way Tiger did??? ? is you Manti??
The fact that they are one in a million is what gives them the ability to generate money. People want to see the extraordinary, they want to see greatness and feats accomplished that they KNOW they could never ever pull off. What you think ? gonna pay thousands of dollars for seats to watch the UPS ? deliver a package? Stop being dense. -
IamtheVILLE wrote: »This notion that pro athletes are overpaid is just dumb. The reason that Lebron, Pujols, etc get paid more than the UPS ? is because they are literally one in a million. Any ? can deliver packages, not every ? can do what these guys can do in their sport...thats why they are paid the way they are. Its no different than ANY other industry or profession.
fixed for ya homie
they get paid like that cause they generate money. not because their one in a million. saying that would be like
saying lebron is the only ? who can dribble a ball, pujols the only ? who can swing a stick etc.
WTF?? You seriously believe that Lebron isn't one in a million, ? that billion?? You going to sit there and tell me that there are a million ? that can hit the ball the way Pujols does? Or can shoot a -18 at Agusta the way Tiger did??? ? is you Manti??
The fact that they are one in a million is what gives them the ability to generate money. People want to see the extraordinary, they want to see greatness and feats accomplished that they KNOW they could never ever pull off. What you think ? gonna pay thousands of dollars for seats to watch the UPS ? deliver a package? Stop being dense.
I think we all get that.., and if that's the angle you want to take then I'm sure Lebron isn't the only one underpaid, by a large amount.
My problem is singling out Lebron. -
lebron knew this going in...
but he got mcdonalds, coke, nike, statefarm endorsement dollars so hes good..
the ? needs his own line of headbands tho! -
IamtheVILLE wrote: »This notion that pro athletes are overpaid is just dumb. The reason that Lebron, Pujols, etc get paid more than the UPS ? is because they are literally one in a million. Any ? can deliver packages, not every ? can do what these guys can do in their sport...thats why they are paid the way they are. Its no different than ANY other industry or profession.
fixed for ya homie
they get paid like that cause they generate money. not because their one in a million. saying that would be like
saying lebron is the only ? who can dribble a ball, pujols the only ? who can swing a stick etc.
WTF?? You seriously believe that Lebron isn't one in a million, ? that billion?? You going to sit there and tell me that there are a million ? that can hit the ball the way Pujols does? Or can shoot a -18 at Agusta the way Tiger did??? ? is you Manti??
The fact that they are one in a million is what gives them the ability to generate money. People want to see the extraordinary, they want to see greatness and feats accomplished that they KNOW they could never ever pull off. What you think ? gonna pay thousands of dollars for seats to watch the UPS ? deliver a package? Stop being dense.
doggie you said one in a million. if thats the case he should be in a circus. and at first nobody got paid in the early stages of sports so you are out your league. they generate money ? . hell college generate money too and they aint one in a million but people come to be entertained. hell ? pay money to see the xgames too and nascar and so on and what do they all have in common? entertaiment. hell you might as well say actors are one in a million too. like yo nobody can say muthafucka like sam jackson even though everybody says muthafucka. see what im saying.
