Breaking Down LeBron James’ Options in Next Contract with Cleveland Cavaliers

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LeBron James will re-sign with the Cleveland Cavaliers; we just don’t know when or on what type of contract.

James can follow his customary route of signing another one-and-one deal and opt out again next summer. He could also end all doubts about his long-term commitment to Cleveland and agree to a multiyear max extension with the world champion Cavaliers.

Should James, who is already the world’s third-highest-earning athlete in 2016 according to Forbes, continue to wait and cash in next summer to reach his max value? Or should he sign a salary-cap-friendly deal now to help the Cavs save money for future outside help?

    

Money Breakdown

Since Cleveland doesn’t own James’ full Bird rights yet, signing a one-year deal would net him $27.5 million in the 2016-17 season. If he were to sign a four-year max extension, his beginning salary would actually be higher, starting at $31 million.

This is because the Cavs don’t have the cap space to sign James outright and can only increase his 2015-16 salary of $23 million by 20 percent, giving him the $27.5 million figure. Since he’s played two consecutive years in Cleveland, James does qualify for Early Bird rights. This means he can sign a four-year deal beginning at $31 million with 7.5 percent annual raises, per Bobby Marks of The Vertical.

While James stands to collect an extra $3.5 million in 2016-17 if he signs a multiyear deal, he can make much more by continuing to stay patient.

Here’s how the next four-to-six years shake out with a one-year deal versus a max extension.

After reaching a record-high $70 million this past season, the new salary cap will jump to $94.1 million in 2016-17. It’s expected to make one more significant leap up to an estimated $102 million in 2017-18, per Eric Pincus of Basketball Insiders.

This means a salary north of $40 million by 2020-21 for James. As of the end of the 2015-16 regular season, only Michael Jordan and Kobe Bryant have recorded salaries of at least $30 million.

Anything after this season is purely a projection, of course. While the current collective bargaining agreement runs through 2020-21, either the league or player’s association can opt out by December 15.

A new CBA could add a “super-max” provision, specifically for players like James who deserve to earn far more than the current max that many above-average players are getting today. It may behoove James to sign a one-year deal for the sole purpose of …

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