Once upon a time, sport was the haunt of the amateur, something men (and sometimes women) played after work had finished for the week. It was popular—not just with the players but also with those who gained their entertainment from watching their heroes.

But heroes have a value, and over the last century, the growth of professionalism spurted up from the soil of amateurism. Joe DiMaggio, Billy Jean King, John McEnroe, O. J. Simpson, Michael Johnson, Tiger Woods, Michael Jordan. Mike Tyson to Cristiano Ronaldo.

They are the “Galácticos” in their respective sports, but too many times their private lives are peppered with failure, embarrassments and pure financial blunders—much to the amusement of the public. But there are astounding and inspirational exceptions—contrary to widely believed stereotypes within the sports industry, and that counts for both success and financial failure.

Sports players do not just make their income from their prowess on the field, around the track or in the ring. Obviously, those who have exceptional skills in their field hold a great advantage over we mere sporting mortals, but we can still take lessons from them. Especially the way that the financially most successful athletes diversify as their careers develop.

David Beckham was a good soccer player. Talented, but certainly not a great. However, as well as a particularly fine right foot, he had two additional assets. These were astonishingly good looks and a superstar wife. Beckham was vilified as a young player. His naive over-reaction to a tackle saw him sent off in a World Cup match, effectively removing his country, England, from a tournament they may well have won.

Yet, through good advice, promoting his looks, and manipulating the extensive public interest in his marriage to a Spice Girl, he has made himself financially extremely rich for life. He now holds financial empires, along with his wife, in fashion, cosmetics and perfumery, modeling and property.

However, he is not the subject of this post. A true King is what we are no focusing on. A person who has become a money master in his own right.

LeBron James – The Money Master

“I’m going to use all my tools, my God-given ability, and make the best life I can with it.”—LeBron James

LeBron James
King James

Today, perhaps the biggest name in American sport is LeBron James, a man who has taken an astonishing natural talent, allied it to a physicality that is exceptional, and turned himself into not just a national, but a global superstar.

But LeBron James is more than just a sportsman. Like many high-earning players, he is also a shrewd and successful businessman and investor. As his sporting career comes towards a glorious end, his business and financial interests occupy an ever-greater percentage of his time. Certainly, his work has earned an accolade from one of the most successful entrepreneurs on the planet—Warren Buffet.

In an interview with NBA TV, Buffett described LeBron as “remarkably mature,” being “plenty smart about financial matters,” and saying, “I was impressed with him right from the moment I met him.”

James himself recalls the conversation between the two. “Warren Buffet told me once and he said, ‘always follow your gut.’ When you have that gut feeling, you have to go with, don’t go back on it,” he said.

Upbringing and Career

LeBron James, King James, the pre-eminent name in the world of basketball, the player many believe is the greatest in the history of the sport. The King has amassed a fortune worth over $300 million. Not bad for a kid brought up by a single mom in the tough city of Akron, Ohio.[i]

Indeed, LeBron’s early life was tough. Initially, although his mother was just a young kid herself, but with the support of a caring grandmother and loving great-grandmother, plus a large, rambling house to run around in, life seemed good.

But before he started school, both of these influences on his life died. He and his mother were forced onto the streets, unable to heat or maintain their home. They spent years staying for a couple of weeks at a friend’s home, before moving on to another short-term pad. This was a kid who moved around as much in his early life as he does now on the courts over which he reigns. This was a crucial point in LeBron’s life. He was getting into trouble at school, failing in his studies, developing an attitude (not least as a reaction to his height, which marked him out as different—something a child never wants to be). It looked as though James would be lost to the good side of society and end up among the gangs that patrolled Akron.

However, stability entered his life, moving him back onto the right side of the tracks, when a coach spotted his enormous sporting potential. From then on, like a playbook out of a Hollywood movie, everything changed and fell into the right places.

His First Big Break – Nike

Firstly, this man, then another coach, took him into their family, providing the role models he needed. The money started to roll in as soon as he started playing professionally after finishing high school, leaving his education early so he could pursue his chosen career at a level consummate with his talent.

A pact entered with Nike when he was still in high school spanned seven years and earned him a staggering $90 million. His initial agreement with the Cleveland Cavaliers earned him $18.8 million for a period of four years when he was still an amateur. After 44 years of Nike’s existence, it entered into its first “lifetime” deal. That too was with LeBron James.[ii]

It was a contract that would see James earn over $1 billion. Based on the sales of James’ trademark shoes, the deal began in December 2015.

In August 2016, he entered into another pact with the Cleveland Cavaliers; this would see him rake in earnings of $100 million over the next three years. Another record. James has a range of endorsement deals off the court. A nice supplement to his already enormous salary, by just promoting various companies’ products including his own line of fashion items. Companies that have entered into promotion agreements with James include Kia Motors, Upper Deck, Coca-Cola and Beats.[i]

From a business perspective, LeBron James is different from many other sporting icons in that he has diversified into fields that are not directly related to his sporting successes. While his salary, and the endorsements that come from his fame on the court, still account for a significant part of his earnings, when he finally retires from the sport, he will not see wealth slowly slip away as has been the case with many other great sports players.

With the best will in the world, fame is transient, and after a generation or two, the appeal of LeBron as a sporting role model will begin to fade. He will not attract the same level of sponsorship as he does today. But because he has used his business sense, and his willingness to listen to the advice of experts, he has entered many other investment fields, including food, leisure and entertainment.

For example, thanks to Blaze Pizza (James is one of the founders), the franchise chains are in 25 states in the U.S., and they are notably big sellers in Miami and Chicago. The company has trebled its sales (to $101 million) over the last couple of years.[i]

His investment in the entertainment industry through SpringHill Entertainment and another company, Uninterrupted, earned him a $15.8 million investment from Time Warner. This has gone a long way in establishing him as a force to reckon with in the media and entertainment industry. His companies produce hit series and shows including Survivor’s Remorse and Cleveland Hustles.

But LeBron James is far more than simply a super talented basketball player with an eye for a business opportunity. His financial success goes way beyond the large salaries he is able to generate. Because James has another outstanding talent—as an entrepreneur and investor.

Learning from Mistakes

LeBron dealings with friend and associate Maverick Carter has another lesson we can take here. Maverick Carter has not always offered the best advice. A case in point was the way in which LeBron James announced his move from the Cleveland Cavaliers in the early 2010s. James was already a superstar, winner of numerous MVP awards, and the most coveted player in the league.

He was also a hometown boy. His decision to ply his trade elsewhere was something totally within his rights. He had become a free agent, so he was not breaking a contract; as an Olympic Gold-winning athlete, he wanted to continue his career with a team that could become play-off champions, something just outside the reach of Cleveland at that time. (Something, as fans know, LeBron remedied during his second spell with the team.) So, he chose to move to Miami Heat, a Galactica of a franchise, and one that could deliver the world with LeBron on board.

For James, it offered further chance to promote himself and increase his earning potential, but more importantly, it gave him a chance for success. Something that drives the greatest sportsmen more than just money. All but the most blinkered of Cleveland fans would have understood this.

But the guidance he was offered in announcing that move was ill-thought-out. Appearing on an ESPN special during which, with bling and glitz, he announced that he was leaving his hometown team to join the superstars of Miami, was ill-judged. LeBron James was one of us, and we do not announce that we are changing jobs to trumpets and lights on national television.

Maverick Carter realized that an error of judgement had been made, and so he did everything possible in order to redeem James’ career and ensure he struck the best deals in history. Ever since this PR debacle, LeBron has been careful how to treat his fans and the public. He understood that advisors make mistakes, too, and that he needed to take personal responsibility off the field as he did on the field. This understanding served him well, as he has continued a successful career in basketball, business dealings and very soon a new field: investing.

Learning from the Best

James has always been passionate about his businesses dealings. But he has kept his mind clear as well. This clarity of thinking, not getting carried away by events, has served him well. He does not forget that his art is borne through constant guidance and inspiration from personalities who are known and respected all over the world. He seeks guidance and he seeks it from the best.

When LeBron started out learning about entrepreneurship and investing, the name Warren Buffett naturally came up as America’s most successful and most famous investor.

Through his own initiative, LeBron sought advice from the Oracle of Omaha, and when the chance came in 2007, he stayed with Buffett for a weekend in Omaha.

“I sent an e-mail about this to Warren Buffett. I’m a kid from Akron who lived in poverty for a long time.”[ii]

Since then their relationship grew, with LeBron seeking regular council, sending emails back and forth, even sending his personal financial statements to “Uncle Warren” (which is what he respectfully calls the billionaire investor, and in return for his advice, he invites Buffett to many of his NBA games).

The respect for each other is mutual and grew over the years: Warren Buffet is reported to have said this about him, “He’s savvy. He’s smart about financial matters. It’s amazing to me the maturity he exhibits.”[iii]

For LeBron, it goes beyond just mundane business or investment advice: “I had an opportunity to go and spend some time with him a few years ago and our relationship just continues to grow and grow and grow. On business and then personal stuff, as well. So, it’s cool.” James added.

It seems that even King James is not beneath good council nor learning from the leading experts in fields he is not King in. That truly makes a great king!

Learning from other Money Masters

One of his first forays into this field involved his association with Beats. The reported sale of Beats Electronics to Apple is rumored to have earned him $30 million. Every businessman needs a big break; this can come when they get a profit from their array of assets, for example. LeBron James made a $4 million profit from the sale of his house in Coconut Grove. He had initially bought it for $9 million when he joined Miami Heat, selling it for $13 million when he decided (to huge public celebration in the north) to resume his career at Cleveland.[iv]

No doubt some of that additional value came from the reflected glory cast on the rich bidding for a house in which LeBron James had lived. In addition to these, James is a minority shareholder of Liverpool Football Club, a deal he entered into with the help of Fenway Sports Group. Another wise move, it seems. Under the management of German coach Jurgen Klopp, the once mighty team has regained its status as one of Europe’s leading clubs in this cash-rich industry.

Last season, Liverpool reached the Champions League Final, Europe’s premier competition. This season, many are tipping them to regain the title for the first time since 1990, which marked the end of the dominance of domestic English and European football they had enjoyed for almost two decades.

As we can see, one of LeBron James’ greatest assets is his superb timing. The value of Liverpool Football Club is about to go through the roof (just as what happened with his Miami home), and he is there to reap the rewards. Such timing, though, is not down to chance, but to the shrewd observation of all the markets that hold interest to him, the development of strong connections in these markets, and the willingness to listen to and consider advice.

LeBron James has been categorical about how he invests his money. Close to his heart are family, personality, devotion, originality, and his hometown of Akron. These considerations inform the investment decision he makes.

His personal wealth is managed through his own marketing bureau, LRMR Management Company. This has made him stand out from the rest of his peers in the sports and entertainment industry, many of whom outsource this very critical function to other entities. This can mean that very intimate financial information and secrets lay in the hands of a multitude of different people.

The potential for leaks, or risk to the money, is increased when it is controlled through third parties. In very bad situations, it might lead to manipulation and coercion from other competitors due to financial espionage.

In addition to this, LeBron James’ former partner at LRMR was the turbo engine that propelled him to be big in his professional and business fields. He was the man behind every business deal and he negotiated all of these in a manner that was the envy of many.

James, therefore, associated himself with a key ally who has been pivotal in the creation of his enviable business status. He picked his most trusted friend from high school, who has guided him in securing some of the best investment moves of any sports player in history.[v]

LeBron James – The Social Pioneer

As we alluded to earlier in the chapter, a facet that defines LeBron James’ character is his tough upbringing. Born between Christmas and New Year in 1984, the first few years of his life were comfortable, if not salubrious. His single mom, Gloria, was just sixteen when he was born, and he was brought up in an extended family within a large, rambling house in Akron. But when first his great-grandmother, then shortly afterwards his grandmother, died, the toddler saw his world begin to crumble.

Gloria and her brothers could not meet the financial demands of the house, and soon she and her son were homeless, forced to spend time moving around between friends and family. LeBron was a demanding child; big for his age—too big to be comfortable in his body—and one to whom school meant little. It was only after he was spotted as a potential junior running back for a local youth football team that he began to develop a purpose.

When the coach, Bruce Kelker, offered the opportunity for Gloria and LeBron to move into the home he shared with his young wife, she jumped at the chance. That worked out well until Kelker and his wife were ready to move on, and then another coach, Frank Walker, offered nine-year-old LeBron a share of his son’s room. Although there was no room for Gloria in the house, the arrangement worked out well. With strong role models, LeBron got back on track. Within a year, the ten-year-old had turned from miscreant to, if not exactly model pupil, one with a direction, at least.

The rest, as they say, is history. But history is only useful if we take note of it. And LeBron certainly has. As a globally renowned sportsman and a very rich man, he has two ways of spreading good. He takes advantage of both, mostly to give the best chance possible to kids in his home city of Akron.

LeBron uses his wealth and fame to promote many charities, and he has founded others. He holds regular counseling sessions where he talks with boys at risk of going off the rails. What could have more influence on a damaged fourteen-year-old than being addressed by a hero? Not only is the boy facing a physical specimen of great proportions, not only a leading sportsman but a man who knows exactly what it is like to grow up in a rundown city like Akron.

But perhaps most pertinent of all is the school LeBron finances through his charitable foundation. Fees, uniforms, tuition—all is paid for to give the needy the best chance in life they could have under the circumstances in which they live. Of course, it is a drain on his finances but, although this is not the reason for his charitable work, it does win him brownie points in other aspects of his financial life. It helps to promote him as a good man, one who cares and can be trusted. It provides goodwill, on which business plans often depend. Those are additional benefits; LeBron undertakes his charitable work for the good of others.

Some Conclusions

While his sporting career is coming to an end, and whether he moves into media, coaching, full-time business, community work or a combination of them all, we can be pretty sure he will make a success of whatever he decides to do.

It is hard to think of many better examples of a person taking his greatest attribute, honing it to as close to perfection as can be imagined, and then using it as a stepping board to even greater glory—this time in his business enterprises. He personifies the importance of listening to others, taking advice, learning from mistakes and believing in himself.

LeBron James, from poor boy to one of the richest men in the United States. While most of us cannot dream of possessing the physical skills of a man such as he, we can take the lesson of how he used one facet of his life—his basketball—to lead to success in another—his financial prowess.

The Mechanics of Success

Both LeBron James and other sports stars perform their professional duties at the highest level in their respective fields. Professional sport is about supreme performance, and in their own ways, each is at the top of their game. This is true whether we are speaking of LeBron, the basketball superstar, or Boris Becker, Mike Tyson and Co., the superstar in their respective fields.

Their individual talents, but also dedication, drive and passion for their profession, allowed them to achieve the fame and recognition they deserve. In turn, fame translated into high income—or maybe it was their huge incomes that contributed to their fame. Through a detailed study of their lives, we can see how success really appears to those who have it in abundance.

Yet, each couldn’t be more different when it comes to the lives beyond their professions. LeBron from Akron, a black man from a poor neighborhood fighting for his early financial survival.The kid from the rough neighborhood, known as a bad boy on the field, succeeded not only in his profession but also as an entrepreneur and money manager.

Managing Money a Real Difference in Life

We all know the horrific examples of famous sports superstars of their personal failures and financial blunders. Examples range from Mike Tyson in boxing to Boris Becker in tennis. A recent case in England illustrated this perfectly. Alan Hudson was the soccer-playing equivalent of these two in his day, a super-talented player performing at the highest level. Now in his sixties, he is homeless and destitute. Paul Gascoigne was the star of the 1990 World Cup; now he is constantly in and out of treatment centers, living on the edge and the kindness of many friends who have made a life after sport. If any sporting star seemed likely to fall, it would be LeBron James.

Yes, LeBron leads an extravagant lifestyle with spending habits that seem excessive to us pure mortals. He regularly shows off his wealth on his Instagram feed—a collection of toys, expensive designer goods and the exotic places to which he travels. And nothing is wrong with that. He can afford it, as his income justifies his spending. Besides, these days, clever marketing strategies monetize an extravagant lifestyle—just ask the Kardashian/Jenner sisters. It’s all about staying relevant to marketers and fans alike. And, in LeBron’s case at least, paying back some of his own fortunes through the charitable institutions he founded and supports.

The reason for each of their financial outcomes is rather simple, although biographers might tell us otherwise. LeBron James was dedicated, curious and interested in managing money. He studied it, spent time and effort on it. From his success in basketball, he transferred his winning formula to business and money management. The most illustrative example is LeBron James’ own initiative to consult with the best. He called out to Warren Buffett, and rather publicly celebrated the relationship of which both are proud.

LeBron James, from poor boy to one of the richest men in the United States. While most of us cannot dream of possessing the physical skills of a man such as he, we can take the lesson of how he used one facet of his life, his basketball, to lead to success in another—his financial prowess.

[i] “The pizza chain backed by LeBron James just tripled sales,” Business Insider, accessed September, 2018, http://www.businessinsider.com/blaze-pizza-tripled-its-sales-2016-3?IR=T

[ii] “Here’s how Warren Buffett told LeBron James to invest his millions,” John Szramiak, Vintage Value Investing,  accessed September, 2018, https://www.businessinsider.com/warren-buffett-investing-advice-lebron-james-2016-6

[iii] “The Incredibly Smart Things LeBron James Has Done With His Money,” Fool.com,  accessed September, 2018, https://www.fool.com/investing/general/2014/10/12/the-incredibly-smart-things-lebron-james-has-don-2.aspx, http://www.businessinsider.com/warren-buffett-investing-advice-lebron-james-2016-6?IR=T

[iv] “LEBRON JAMES: How the king of the NBA spends his millions,” Business Insider,  accessed September, 2018,  http://www.businessinsider.com/how-lebron-spends-his-money-2015-12?IR=T/#he-makes-around-44-million-per-year–nearly-twice-his-nba-salary–in-endorsements-2

[v] “Maverick Carter, Founder of LRMR Innovative Marketing & Branding,” Inc.com, accessed September, 2018, http://www.inc.com/30under30/2010/profile-maverick-carter-lrmr-innovative-marketing-branding.html

Get Free Email Updates!

Signup now and receive an email on our updates.

We will never give away, trade or sell your email address. You can unsubscribe at any time.

Similar Posts