4 Reasons LeBron James’ Decision Makes Business Sense

by Daria Steigman on July 9, 2010

Lebron James | Business not Marketing/PR or Branding | Independent Thinking | Steigman Communications, lccMike Greenberg said on ESPN Radio this morning that “you need to separate the decision from how it was done.” (He was talking, of course, about LeBron James.)

He’s absolutely right.

My friend Justin Goldsborough has a terrific post on James, Joe Mauer, and brand legacies in sports. His key point:

If he was still hoping to be the biggest brand in the world or the biggest brand ever, that chance is gone. In fact, he won’t even be the biggest brand in Miami. That’s Dwayne Wade’s team.

I agree, but I think–disappointment in Cleveland aside–we shouldn’t lose sight of the fact that James made a business decision. And it was a fascinating one.

1. We’ve known for several years that James, Wade, and several top NBA players took shorter deals in the past in order to time their arrivals on the free agency market. It was a (then) subtle way to level the playing field a bit in a sports world dominated by team owners.

2. One man cannot be responsible for the economic well-being of an entire city. I’m very sympathetic to the people of Cleveland, especially the small business owners who have benefited from great pre-game crowds. But let’s step back and recognize that a business model dependent on one person, one client, or one product being an unending success is a bad business model.

3. One player cannot be responsible for an entire franchise. Plus Dan Gilbert’s classless response on losing his star player tells me he’s the last person I’d want to work for.

4. James is taking less money to work with people he likes and admires. (While we don’t know yet what he’ll earn in Miami, there’s no question it will be far less than the max contract he’d have had in Cleveland.) Isn’t this the type of decision we’d typically be applauding?

What do you think?

Photo by David Shankbone (Flickr).

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July 9, 2010 at 9:56 am

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1 Justin Goldsborough July 11, 2010 at 5:39 pm

You make good points, No. 4 especially. Athletes should be applauded for taking less money. However, I am much more likely to applaud a player like Mauer for taking less money to stay home. Usually athletes are forced with a decision to take less money to stay with the team that gave them a start versus go to a big market like New York or L.A.

LeBron’s decision makes some sense if his No. 1 goal is to win NBA championships. Although many sports talking heads have hypothesized that the Heat will struggle without a true center. That’s just a different goal than he has verbalized in the past. His brand and status will take a hit from this move. They can’t even give his jerseys away in Cleveland.

LeBron may win 4 or 5 titles with the Heat. But he may also do so as second fiddle to Wade and lose the opportunity to stand out. That’s fine, just not what I expected from a guy that some people have said has a chance to be the best NBA player ever. Kobe never would have made such a move. He’s too competitive.

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2 Daria Steigman July 12, 2010 at 9:04 am

Hi Justin,

I completely agree with you on the brand piece. It’s one of the reasons I love both Tony Gwynn & Cal Ripkin. But I still think the “brand” hit to LeBron James is more about HOW he made his decision than about the decision itself.

If the “new 3″ win a championship right away, or multiple ones in the next few years, almost no one’s going to care whose team it is. Tiger Woods messed up by pretending to be a brand (family first) that he wasn’t, but people will still tune in to watch him hit a golf ball next time he’s in the hunt. Winning is the best brand for athletes.

And I still love the way all the NBA guys asserted their clout and opted to build their own team.

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