When the news of the deal first broke back in December, estimates on James’ payout ranged from $400 million to $500 million for the most part, though some outlets did throw out a $1 billion high. Of course, this was all just guesswork on the media’s part, as there is a lot of uncertainty when it comes to endorsement deals — particularly one with a never-before-seen “lifetime” tag.
The payout is largely contingent on sales, meaning there’s no way to project what kind of staying power the LeBron brand will have. Still, not even Michael Jordan, who catapulted the company into billion-dollar revenue during his NBA career, has a lifetime contract like LeBron’s. But does that mean King James has surpassed His Airness as the king of Nike, and in the process, all professional athletes in the endorsement world?
Let’s break it down by the numbers.
$90 million: Estimate of James’ Nike deal from 2003-2010 (~$11 million per year).
$100 million+: Estimate of James’ Nike deal from 2011-2015 (~$20 million per year).
$340 million: Estimate of James’ Nike U.S. retail sneaker sales in 2014, via SportsOneSource.
0.4%: Percentage of Nike’s $30.6 billion 2015 in revenue that James may have accounted for.
$110 million: Estimate of 2015 earnings, with $100 million from Nike, via Forbes.
$480 million: Jordan’s Nike earnings from 2002-2012 (~$44 million per year), presented in court documents by his attorney.
$3 billion: Estimate of Jordan brand U.S. sneaker sales in 2015, via SportsOneSource.
8%: Percentage of Nike’s $30.6 billion 2015 revenue that Jordan accounted for.
$30.6 billion: Revenue for the 2015 fiscal year.
$50 billion: Targeted revenue for the 2020 fiscal year.
Both NBA greats earn a cut of the revenue from their sneakers, a practice that is still unique to the industry, but Jordan is second to none when it comes to overall revenue. With 10 times the domestic sneaker sales, it’s clear that Jordan is still making significantly more from Nike than James, not to mention the fact that he is worth exponentially more to the company.
The only area LeBron technically edges Michael is in Nike’s faith to forge a lifetime partnership with him, though it’s pretty much understood that Jordan has “at least a de facto agreement for life,” per ESPN’s Darren Rovell.
But here’s where it gets interesting: If the multinational corporation is indeed shooting for a two-thirds jump in annual revenue over the next five years (from 2015-2020), it could be planning to break out an exclusive LeBron brand, similar to Air Jordan, sometime within the next few years.
With Stephen Curry (who is signed with Under Armour) and the Golden State Warriors currently on top of the basketball world, why not give James a few years to try and win another NBA championship to revamp his international popularity? With free agency flexibility in 2016 and beyond, LeBron leaving Cleveland (again) for a larger market can’t be ruled out either. The impending Space Jam 2 release is yet another consideration.
Would his own brand enable LeBron to rival the G.O.A.T. in the world of sports sponsorships? The verdict will be rendered by LeBron’s performance on and off the court, Nike’s ability to capitalize on it, and most importantly, consumers at the cash register.