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LeBron James and his complicated contract issues
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Added July 4th, 2016 by Ian

LeBron James and his complicated contract issues

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Cleveland Cavaliers forward LeBron James is rubbing some people the wrong way as he tries all possible angles to wrangle the most money out of the NBA club. For the third straight year James has announced his intention of becoming a free agent. But like last year, there’s not any chance of him leaving Cleveland. The MVP of the just-finished NBA Finals victory over the Golden State Warriors became a free agent on July 1st when he decided not to exercise his 2016/17 player option on the two-year contract he signed last year. The move was purely a financial one as it allows him to make more money than the $24 million he was due next season.

James told the media he loves playing in Cleveland and doesn’t intend leaving, but there are some contract technicalities that he and his agent Rich Paul need to sort out. If James signs a new year-long contract or a two-year-deal with a player option for the second year then he’ll make an extra $3 million next campaign as he’ll earn $27 million. It’s believed this is James’ objective as he’d then be able to sign a multi-year contract next season which would pay him at least $30 million a year. The reason for this is because the NBA salary cap is expected to rise to about $107 million. James doesn’t want to sign the long-term contract this year while the salary cap is still $94 million.

Yes, it’s true that James is one of the best basketball players ever and without him the Cavaliers likely wouldn’t have won an NBA title. But some fans see his move as being selfish since it gives Cleveland little salary cap space for other players down the road. Of course, Cavaliers owner Dan Gilbert could also fork over the luxury tax, which will cost the team even more money. However, James and his agent have hit a snag in their planning due to the existing collective bargaining agreement (CBA) between the NBA and the players’ association. James could sign a new two-year deal this summer for $56.3 million and then opt out of the second year next summer.

However, if he does that, the current CBA won’t let him sign a five-year, $200 million deal next summer because of a rarely-used clause referred to as the “over 36 rule.” It’s a complicated clause, but it basically doesn’t allow an NBA team to sign players to a maximum long-term four or five-year contract if they’ll be 36 years of age in the final season. Therefore, he won’t be able to sign a five-year, $200 million contract nest year, but could sign it now while he’s still 31 years old. If he waits until next year to sign he’ll be 36 when he enters the final year of the contract.

The four-time NBA MVP and three-time MVP of the Finals could sign a four-year deal this summer for approximately $138 which sees him paid the maximum allowed in the first year and guarantees the deal should he suffer a catastrophic injury. However, this option means he won’t make the maximum for the following three years. If James signs next summer he’ll only be able to sign a four-year contract worth approximately $157 million due to the over 36 rule. There is one solution to the over 36 rule, but it’s a bit drastic. The current CBA has a clause which allows the owners or the players’ union to opt out of it this December 15th and then negotiate a new CBA.

This is a possibility especially since one of the vice presidents of the players’ union is one LeBron James. This would allow the union to try and get rid of the over 36 rule or change it to an over 37 or over 38 rule. In this scenario, James could sign a one-year deal with Cleveland this summer and then end up earning approximately $233 million with the Cavaliers over the next six seasons in total. It seems like a lot of hard work though for a multi-millionaire athlete to try and take home as much money as he possibly can.

 
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