What The Knicks Just Told LeBron: Come To New York And Make $1 Billion
July 1, 2010 - 4:02 pm
The Knicks just finished pitching LeBron James. Their main selling point: You could make a billion dollars playing in New York. You can't earn anything close to that anywhere else.
To make the case, they commissioned a study from marketing consultant Interbrand that says LeBron could earn close to $1 billion over his lifetime in salary and endorsements if he makes Madison Square Garden his permanent home--their high-end estimate sees him earning as much as $2 billion. That outshines the estimated $700 million he’d likely earn in Cleveland, the $690 million in Chicago, and $600 million in Miami.
It’s a crafty attack that goes right after their rivals' best case for nabbing LeBron: that his brand is so internationally recognizable, where he plays has little influence on his overall earnings. In fact, the same study claims that any generic free agent could see his lifetime earnings jump 30% by signing with the Knicks.
To come up with the numbers for the Knicks, Interbrand says it ran through 50,000 computer models of a potential LeBron career, using more than 200 variables like individual performance, fan demographics and championships. The report is light on the details of its methodology, but comes to this conclusion: LeBron has a 50% chance of earning at least $1 billion in New York. In Cleveland and Chicago the odds fall to 1%. The study put a 0% chance of LeBron making $1 billion playing for Miami.
Included in Interbrand's math: an NBA title in New York could be worth $240 million to LeBron, about $60 million more than if he brought a ring home to Cleveland, and more than double the value of a Chicago championship. Why? NYC is a huge market, the business capital of the world and home to a large (and wealthy) fan base hungry for a winning team--the Knicks haven’t held the title since 1973. LeBron already owns Cleveland, a small city with little clout. Michael Jordan’s six championships still hover over Chicago. Miami has a fickle fan base, a recent title and its own superstar in Dwayne Wade.
Over the past year, Forbes estimates that LeBron earned $43 million in salary and endorsements (including Nike, State Farm Insurance, Coke, McDonalds and Upper Deck) playing for small market Cleveland. Good money, but a billion dollars it is not.
What The Knicks Just Told LeBron: Come To New York And Make $1 Billion « SportsMoney - Forbes.com