24-year-old LeBron James’ Took a $100,000 Paycut But Ended up Gaining 20% Profits From Xbox Deal: “Equity and Control”

Los Angeles Lakers star LeBron James signed a unique deal with Microsoft that allows the NBA game to use his likeliness. The deal was signed back in 2014, at a time when LeBron had received multiple other offers. But, his business manager Maverick Carter had negotiated a deal with Microsoft. However, the former Cavaliers’ superstar ended up receiving bigger offers from other publishers, such as EA Sports.

However, Brain Windhorst wrote in his book, “LeBron, Inc.: The Making of a Billion-Dollar Athlete“ that Carter responded with a business masterstroke. He negotiated an annual fee that was $100k lesser than the initial amount but inserted a 20% profits clause. And that proved to be genius.

LeBron James wanted more equity and control via his deal with Microsoft

Most current athletes and players have dealt directly with EA Sports and NBA 2K. This includes footballers, basketball players, and a range of other athletes.

However, LeBron James’ global appeal allowed his business manager to negotiate a much smarter deal. James had received larger offers from other companies and had initially received an offer with a $350k annual fee.

However, in a bid to generate more equity and control over his brand and likeliness, Carter decided to insert a profit-sharing clause. Depending upon how the NBA 2K game performed, James would receive a 20% share of the profits. This came along with a reduction of $100k in the annual fee, bringing his fee down to $250k.

LeBron James’s uncanny business decisions have allowed him to generate a huge net worth

With a total net worth of over $600 million, James is easily the most popular NBA player in the modern era. James has been featured on the covers of innumerable NBA 2K games, and more often than not, finds himself ranking high in the ratings list.

Apart from his business ventures including stakes in Liverpool FC and MLB’s Boston Red Sox. His deal with Microsoft allows him to claim a stake in overall profits. That is unheard of when it comes to player rights.

@Xbox thanks alot! I need a Xbox 1. Heard they are going to be awesome! #GamersInMyHouse

— LeBron James (@KingJames) October 7, 2013

Furthermore, while Maverick Carter undoubtedly pulled off a masterstroke, he was only able to do so due to the global appeal that LeBron possesses. Regardless, James has plenty of things to worry about at the moment. The LA Lakers are trailing 0-2 to the Denver Nuggets and require a huge effort from the legend to fight back.