Earlier this month, Nike announced Lebron James would receive the first lifetime contract in the apparel company’s 44-year history. James is in rarefied air. His lifetime deal is reportedly worth more than the $500 million tag that was rumored, according to a USA Today source knowledgable of the agreement.
James signed the deal less than a month before his 31st birthday, but has been working with Nike for 12 years. Nike has made 13 versions of James’ flagship shoe. With annual sales of James’ line of sneakers estimated at $400 million, James’ sneakers have likely reached more than $1 billion in sales since 2013.
Still, lifetime deals are not new, and contrary to the label, a ‘lifetime’ deal is not as clear cut as it sounds.
Here is how Lebron James’ lifetime contract stacks up to some of the biggest deals of the last 16 years:
George Foreman and Salton (1999)
Two years after fighting in the last fight of his 25+ year professional boxing career, George Foreman agreed to a $137.5 million deal with Salton Inc. for the company to use his name on products forever. Foreman was also given a stake in the company, forever tying him to its future earnings. His shares were valued at $22.75 million in 1999, or roughly $34 million today.
Foreman’s deal may shed some light into why Nike signed Lebron to his lifetime deal. Salton’s chief executive Leon Driemann told The New York Times the Foreman deal means that the company no longer has to pay 60 percent of all its products’ profits to Foreman and his business partners. Lebron reportedly earned between $15 million and $20 million a year under his former 2010 deal with Nike, even though his sneakers earned Nike more than $1 billion in sales since 2013.
Coach Mike Krzyzewski with Duke (2001)
In November 2001, seven months after winning his third national championship title in 10 years as the head coach of the Duke Bluedevils, Coach Mike Krzyzewski signed a deal with Duke to coach there for as long as he wants. While financial details of the contract were not released, Coach K earned over $30 million dollars between 2009 and 2013, according to documents provided by Duke Vice President for Public Affairs and Government Relations Michael Schoenfeld to USA Today Sports. Even if you average out Krzyewski’s four year compensation between 2009-2013, $7.5 million a year, and apply that to the 13 years of his lifetime deal, Coach K would still earn over $400 million less than what James’ lifetime deal is reportedly worth.
Allen Iverson and Reebok (2001)
Lebron James called Allen Iverson the pound-for-pound, greatest to ever play and in 2001, few could question that. Six months after winning his first and only Most Valuable Player award, and leading the Philadelphia Sixers to their first NBA Finals appearance since 1983, Allen Iverson inked a lifetime deal with Reebok. According to Kent Babb’s Not A Game, a book about Allen Iverson’s career, it was revealed Iverson received $800,000 annually from Reebok. If Lebron is potentially forgoing tens of millions of dollars in royalties, Nike paying the king a yearly allowance is not only feasible, but possibly much bigger than $800k a year.
Tracy McGrady and Adidas (2002)
In May 2002, 22 year old Tracy McGrady signed a deal with Adidas to receive royalties from every piece of clothing and sneaker product associated with his likeness. McGrady got his lifetime deal nearly 10 years younger than Lebron when Nike offered theirs. However, McGrady signed a six-year/$12 million deal with Adidas in his 1996, a fraction of the seven year-$90 million deal James signed with Nike before his first game in 2003.
Ilya Kovalchuk and New Jersey Devils (2010)
At 27, a year before NHL players are supposed to peak, Ilya Kovalchuk signed a 17 year deal with the New Jersey Devils in 2010. The deal was worth $102 million, a fraction of what James’ lifetime agreement reportedly accumulated. Lebron extended his Nike deal by nine years in 2010 and then went on to win two Most Valuable Player awards, his first two NBA titles and became one of the most marketable athletes by 2013. That was the year Kovalchuk decided to retire with 12 years and $77 million remaining on his contract.
Time Warner Cable and the LA Lakers (2011)
The Los Angeles Lakers signed a 20 year deal with Time Warner Cable for the cable provider to be the primary broadcaster of the team. The deal is estimated to be worth $3 billion. The Lakers would pull in an average of $150 million per year from the deal, roughly over seven times the reported $20 million in royalties James receives from his deal previous deal with Nike. Jordan, the crown jewel of the Nike kingdom for three decades, only rakes in $100 million in royalties and his signature shoes accumulated eight times more sales than Lebron’s this past fiscal year. Lebron’s lifetime deal may cement him as the millennial king, but the Lakers are a financial dynasty.
Derrick Rose and Adidas (2012)
In 2012, a year after becoming the first Chicago Bulls player to win the Most Valuable Player award since Michael Jordan’s heyday, Adidas and Derrick Rose agreed to a “lifetime contract” worth $260 million for 14 years. Partnering your company with an athlete is an investment in their professional and personal life. Rose may have been the first player not named Lebron James to win the Most Valuable Player award between 2008-2013, but the $18 million a year and cap on years did not show nearly as much confidence as James’ lifetime deal, partly due to the absence of definitive terms.
Machinima and Ben Vacas (2012)
In 2011, then–21-year-old British World of Warcraft commentator Ben Vacas revealed in a YouTube video, Machinima’s contract with him, signed in November 2011, stipulated the company owned his videos “in perpetuity, throughout the universe, in all forms of media now known or hereafter devised.” On the surface, Vacas’ contract is a jail sentence compared to James’ deal, but both function similarly. A lifetime deal with Nike means there is no possibility of James making an apparel or sneaker line outside of Nike.
Pele and Santos (2014)
While recovering from a urinary tract infection, world renowned soccer legend, Pelè signed a deal with the soccer team Santos in Brazil to allow the club to use Pele’s brand in promotions forever. This deal was done in anticipation of Brazil hosting the 2016 Olympics. Unlike Nike handing James’ a key to the kingdom, this seems more like Pele giving his life to help the first team that signed him. Last year, Santos was valued at $170 million by Forbes Mexico, with Pele valued at a reported $100 million. James’ net worth is a mere fraction of the $15.9 billion worth of the world’s leader in sports footwear and apparel.