‘Why would I bet against myself?’: How LeBron James conquered business

It was an otherwise unremarkable play for the Los Angeles Lakers on Tuesday night: trailing by seven points in the third quarter, LeBron James took the ball in his hands and pivoted towards the net to sink a two-point shot.

The basket brought the Lakers up to 99 points for the game, and James’s career total to 38,388, making him the all-time leading scorer in the history of the National Basketball Association and bolstering his case as perhaps the greatest athlete to have played the game.

But for all of James’s achievements on the court, it may be that his legacy is equally defined by the business empire he has built outside of it. With a personal net worth estimated to be more than $1bn by Forbes, James has honed the model of the sportsman as business mogul for a new generation.

What has distinguished James as a businessman and investor, say associates and sports executives, has been a willingness to venture beyond the reliance on sponsorships typical of many athletes and take financial risks early in his career — a strategy that has been amplified by his on-court success and unusual longevity as a top-level athlete.

Early in his tenure with the Cleveland Cavaliers, James was presented with a nine-figure offer by the late entrepreneur Robert Sillerman to buy half of the rights to James’ off-court earnings, according to a person who works with the basketball player.

James, wagering that his career earnings would ultimately far outstrip the one-off payment, declined the offer. “Why would I bet against myself?” he said.

Like many elite professional athletes, James earns more off the court than he does from his playing salary. But he has shown a prescience for spotting investments years before they become popular, associates say.

In 2011, James took an initial stake in Liverpool football club, the result of converting some of his sports marketing firm LRMR into equity in Liverpool parent Fenway Sports Group. James and Fenway have since expanded their stake in FSG, and as of this week are in talks to increase their holding, according to people familiar with the matter.

Gerry Cardinale, founder of sports- and media-focused private equity firm RedBird Capital Partners, called the initial Liverpool stake an “impressive” investment inked “before this phenomenon of sports as an asset class”, which exploded around the start of the coronavirus pandemic.

Today, James’s portfolio also includes his media company, SpringHill, valued at $725mn, and equity in the takeaway chain Blaze Pizza, an investment he made instead of renewing an endorsement with competitor McDonald’s.

A significant factor in James’s off-court success has been his childhood friend and business partner Maverick Carter, who handles much of the executive functions at SpringHill and co-invests with James in Fenway and other properties.

Since 2005, the pair have worked with asset management titan Paul Wachter of Main Street Advisors, whose clients include Arnold Schwarzenegger and who engineered the sale of Jimmy Iovine and Dr Dre’s Beats by Dre headphones company to Apple.

In an interview, Wachter said that James is “able to process information at a very high speed”, a skill that fans see him execute on the basketball court but which he also applies to investing.

James is by no means the first elite athlete to forge a successful business career alongside a sporting one. Michael Jordan, another contender for the unofficial title of greatest basketball player of all time, created an early blueprint with his pioneering line of signature Nike Jordan shoes — now a category worth more than $5bn for the world’s largest sportswear maker.

Other stars including football’s Cristiano Ronaldo and Lionel Messi, tennis’s Roger Federer and golf’s Tiger Woods have amassed fortunes away from their sports through endorsements and investments.

Each of those athletes has benefited from unusually lengthy careers, though James in particular has defied the odds and thus amplified his earning power. The average NBA career lasts just under five seasons; James is in his 20th year and still under contract with the Lakers for at least another two seasons. Michael Jordan is worth $1.7bn today but he retired in 2003.

Inevitably, the success of James’s business model has led to its adoption by peers and younger athletes, including fellow basketball star Kevin Durant, who has launched his own media company, Boardroom, and tennis champion Naomi Osaka, who has launched a skincare line and last year established her own talent agency.

Michele Campbell, who has worked with James for 18 years and is executive director of the LeBron James Family Foundation, said the player’s trust in his employees and colleagues has been critical to his success.

“You see how he plays basketball on the court, he’s not going down and making every basket on the court, he’s passing and making assists to teammates,” she said. “It’s the same way with him in business.”