LeBron James is one of the smartest basketball players in the league. Time after time, he has proved that with his skills on the court. As for off the court, LeBron is equally smart there as well.
Since he is one of the biggest superstars in the NBA, it is obvious that LeBron earns a lot of money. Apart from his huge salary, he makes a lot of money from endorsements as well. On top of that, James has invested carefully in various businesses over the years.
Combining everything, it's no surprise that LeBron reached billionaire status before even retiring from the NBA. But what's next for the King? According to LeBron, he wants to own an NBA team in the future, and that too in Las Vegas.
The NBA has been thinking of an expansion plan for a long time. Over the course of time, it has been hinted that the NBA wants to add two more teams to the league. One in Las Vegas and the other in Seattle.
But can LeBron really buy an NBA team? Of course, he is a billionaire, but owning an NBA team costs way more than that. Huddle Up founder Joseph Pompliano recently explained how LeBron could own an NBA team in a detailed Twitter thread.
1) We all know @KingJames
recently reached billionaire status, according to Forbes.
Net Worth Breakdown
• Spring Hill Company: $300m
• Fenway Sports Group: $90m
• Real Estate: $80m
• Blaze Pizza: $30m
• Cash + Investments: $500m
But that's not enough to buy an NBA team.
2) Because while the NBA is eventually going to expand & people expect Las Vegas & Seattle to get a franchise.
The expansion fee will probably be $3 billion-plus by the time that happens & LeBron won't be able to afford it by himself.
That's where Fenway Sports Group comes in.
Pompliano started off with the fact that LeBron James has officially been announced as a billionaire by Forbes. Additionally, he provided fans with the net worth breakdown of the King. Despite that, Joe thinks that by the time the league is ready to move forward with the expansion plan, the fee would be over $3 billion. But James still has another trick up his sleeve.
3) For those that don't already know, FSG is a holding company for professional sports assets.
• Boston Red Sox
• Fenway Park
• Liverpool FC
And LeBron's relationship with FSG dates all the way back to a business deal in 2011.
4) FSG wanted to diversify its business and pitched LeBron James on marketing representation.
But LeBron made a genius decision.
Rather than sell his marketing rights to FSG for cash or a commission, he accepted a 2% stake in Liverpool FC.
And that was just the beginning.
Since Fenway Sports Group already has a strong foothold in the professional sports assets, LeBron James having a great relationship with them will help him in the future. Moreover, LeBron proved his intelligence once again when he accepted a 2% stake in Liverpool FC instead of selling his marketing rights to FSG.
5) Liverpool FC's valuation has skyrocketed since 2011.
LeBron's 2% stake was initially worth $6.5 million, but with Liverpool's valuation increasing from ~$500 million to ~$4.5 billion, it is now valued at about $90 million.
But what he did next is even more fascinating.
6) FSG raised $750 million last year by selling ~10% of the business to RedBird Capital.
When that deal was finalized, LeBron was named a partner at FSG (along with Maverick Carter).
And he transferred his 2% ownership stake in Liverpool into a 1% stake in the parent company.
7) Why did LeBron do this?
The equity value of a 2% stake in Liverpool vs. a 1% stake in FSG was roughly the same ($90 million), and it made him a co-owner of all FSG assets (Red Sox, Liverpool, etc.).
But this was much more about the future than the past.
LeBron's initial investment in Liverpool FC could have been a risky move. But that move turned out to be brilliant. Since James invested in the club, it has worked as a good luck charm for them. They have been performing consistently and have won several trophies as well.
This resulted in Liverpool FC's valuation increasing. Later, LeBron transferred his 2% ownership stake in Liverpool FC to the parent company. Thus, he became a co-owner of all professional sports assets owned by FSG.
8) FSG raised the $750 million because they wanted to acquire more sports teams, specifically in the NBA & NHL.
And within months, they agreed to buy a controlling stake in the Pittsburgh Penguins for about $900 million.
But what about the NBA?
That's where LeBron comes in.
9) FSG reportedly did its due diligence when the Minnesota Timberwolves went up for sale.
But they eventually passed, and many people believe it's because they have their sights set on an NBA expansion team in Las Vegas.
And who do I think will run it?
10) This is speculation, of course, but the picture is becoming clear.
LeBron leveraged his brand through equity ownership, long-term thinking & aligned incentives to (potentially) turn something worth a few million dollars into an NBA ownership stake.
Now that's impressive.
Pompliano further explained that the reason why FSG raised $750 million was to invest in NBA and NHL teams. The company fulfilled its wish of owning an NHL team after buying a controlling stake in the Pittsburgh Penguins. But their dream of owning an NBA team remains unfulfilled.
It was believed that FSG would buy the Minnesota Timberwolves, but the company passed on that opportunity. Joe believes it was because they are waiting for the NBA expansion and will probably purchase the team in Las Vegas. Thus, they will have their dream of owning an NBA team fulfilled, while LeBron James will get a team to run.
Of course, Pompliano mentioned that this is still speculation at the moment, he believes the situation is becoming clearer.
Since LeBron James is one of the best players in the league and he has meant so much to the game of basketball, even NBA analyst Stephen A. Smith believes that the league will help LeBron in fulfilling his dream of running an NBA franchise. So at the end of the day, it appears as if everything is confirmed, and it's only a question of when.