LeBron may take less now, for much more later

Updated: July 11, 2006, 2:40 AM ET
ESPN.com news services

LeBron James showed himself to be a shrewd businessman as an 18-year-old when he signed gigantic endorsement contracts before even entering the league. The Cleveland Cavaliers star may have pulled off another smart deal.

Is This Unprecedented?
In the summer of 2000, teams like Orlando and Chicago courted Spurs star Tim Duncan, but he opted to return to San Antonio. Unusually, however, he did so on a four-year deal with the fourth season being at his option, allowing him to return to free agency in the summer of 2003.

In that case, Duncan's motivation seemed geared more toward team success than toward compensation. He was unsure what the Spurs' future held (David Robinson was becoming a free agent in another year), so he gave himself a convenient escape route if the Spurs didn't add to their core in the intervening three years. Of course, that became a moot point when the Spurs won the title in Duncan's walk year, and he re-signed without a second thought.

For John Hollinger's complete Q&A, click here Insider.

Sources have told ESPN's Stephen A. Smith that James has agreed to a three-year extension worth approximately $60 million, with a player option for a fourth season (rather than what was reported earlier as James being able to opt out of a four-year deal).

It had been widely reported that James would sign a five-year, $80 million maximum contract Wednesday. He could have very good reason to settle for less now.

If he were to decline his player option after the 2009-10 season, James would move into a higher salary bracket. As a seven-year veteran, he would be able to sign a contract paying up to 30 percent of a team's salary cap, as opposed to his current ceiling of 25 percent. Furthermore, a shorter contract would give James greater flexibility and leverage, should he decide he is unhappy with the Cavs' direction.

Unlike others from his draft class, James waited one week to agree to the Cavs' contract offer. Cleveland, which saw Carlos Boozer bolt for Utah after verbally agreeing to a deal, started to worry. It could be that James' representatives and the Cavaliers were fine-tuning this aspect of his deal.

No contract can be signed until Wednesday. James is heading into the final year of his rookie contract and will earn $5.8 million this season. His exact salary for the life of the extension will be determined when the salary cap is set by the NBA for the 2007-08 season.

He would have been eligible for restricted free agency in 2007, but James has said all along that he wanted to return to Cleveland, which is close to his hometown of Akron.

"I am very excited and happy to be re-signing with the Cavaliers. Staying in Cleveland ... provides me with the unique opportunity to continue to play in front of my family, friends and fans," James said in a statement released by his publicist this week. "I look forward to working toward bringing a championship to our great fans and the city of Cleveland."

That a superstar would ask to be paid less than that max would be a unique maneuver. It's similar to what Tim Duncan did after his third season with San Antonio.

Then again, James has made a habit of redefining the league. Last year, he became the youngest player in NBA history to average at least 30 points per game over the course of a season. His averages of 31.4 points, 7.0 rebounds and 6.6 assists per game allowed him to join Oscar Robertson, Jerry West and Michael Jordan as the only players in NBA history to average at least 30 points, 7.0 rebounds and 6.0 assists in a single season.

Now, he could be in line for even more record-setting numbers, these ones on his paycheck. How this affects other superstars around the league remains to be seen. Miami's Dwyane Wade and Denver's Carmelo Anthony also said they would agree to max contracts this past week. According to Smith, James discussed the deal he was planning to sign with those players.

Like James, the true value of their extensions won't be known until the NBA sets the 2007-08 salary cap in July of next year. James could be leading the league again ... in business acumen.

Information from ESPN.com's Marc Stein and the Associated Press was used in this report.

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