Forget the money. The money is always going to be there. The Cavs can give him more money than any other team, and they’re always going to give him the most money they’re allowed to. Which is why he’s previously signed a series of year-to-year deals: to keep pace with the rising cap and earn the true maximum each season. While LeBron James’s new three-year, $100 million contract with Cleveland will make him, for the first time in his career, the NBA’s highest-paid player, the money is an afterthought. The length is what’s genuinely interesting, and might provide a glimpse of James’s longer-term NBA future.
The deal isn’t signed yet, but when it is it’ll functionally be a two-year, $64 million contract—the third year is a player option, and it’s a safe bet James will opt out, just as he has in his last couple “1+1" deals. But this is James’s first contract since returning to Cleveland that locks him in for multiple seasons. And that’s no accident.
The CBA is dark and full of terrors, and a few obscure clauses made it wise for James to do one last bridge deal, spanning both the final influx of big TV money into the league, and a new collective bargaining agreement. For one, a two-year deal pays him more money this season. Because the Cavs are up against the salary cap, and because they don’t possess James’s full Bird Rights, they are constrained in the size of a raise they can give him. Cleveland could have only paid James $27.5 million on a one-year deal, while a team with cap space could have given him $30.8 million. But with a two-year deal like this, those rules don’t apply and James can get the true max in Cleveland this season.
Next summer, the cap will jump, but not as high as most predicted: because of the amount of free agent spending this year, the salary cap will rise to only $102 million, rather than the projected $107 million, according to an NBA memo last month. That would put the max-salary tier at $33.5 million, which James will not be able to achieve because he’ll be locked in. But by signing this two-year deal, he’ll gain more in year one than he’ll forfeit in year two: A two-year contract will pay him $600,000 more than would a pair of one-year deals.
At this point in his career, James is maximizing his money, as he should. But he’s 31 years old and he’s starting to think about security—about one last long-term contract. Everyone assumed that would come next summer, after the second significant rise in the salary cap. But it’s not so simple. Thanks to an even more obscure CBA provision reported by USA Today. It’s a little more complicated than this, but the “over-36 rule” prevents older players from signing true max deals. It exists to prevent teams from circumventing the cap by signing players who will retire before the deal’s up, and that’s obviously not LeBron, but he’ll be over 36 by the end of a five-year deal, so it applies to him nonetheless.
The solution? Get that clause out of the CBA. If either the league or the NBPA opts out by December 15th, the CBA will be terminated at the end of this season. That’s expected. There’s no telling how long negotiations on the next CBA will take, but now James won’t have to worry about free agency decisions in what could potentially be a very unsettled summer. And when it’s all worked out, and maybe the over-36 rule is off the books (James is the VP of the union, as it happens)? The TV money will be in, there’ll be no restrictions on the length of the deal he can sign, and James will be ready to ink one last big contract that should take him through age 38.