Despite Michael Jordan Profiting $2.25 Billion, LeBron’s Agent Rich Paul Exposes Dark Side of Massive NBA Deal

Michael Jordan‘s market value goes beyond just sneaker brands. He is the NBA franchise’s face. While LeBron James and Stephen Curry might be the trending names for much of today’s younger generation, MJ still runs the show. And nothing proves this better than the NBA media rights deals.

The NBA might have been founded after baseball and football had already rooted itself deep into American culture but it is the first to rake in millions by way of marketing. Every decision made by the league compares to moves made by the grandest masters of chess. After all, the market value the NBA superstars carry did not simply happen overnight. It was the result of smart merchandising. Michael Jordan is the prime example.

Michael Jordan and his global stardom that got the league billions

While MJ was an active player, his earnings were far lower than what he made after retirement. He is a legend, one of the best the NBA has seen. As far as financial growth goes, it is definitely the global superstar status that gave him the edge over other players. And not just in the NBA. The earnings from his NBA career amount to just $90 million dollars (we know, it’s still a lot more than what any of us could possibly dream of). But, hey, this is the NBA we are talking about.

One of his smarter moves was becoming the second-largest owner of the Charlotte Hornets (Bobcats, then) in 2006. In 2010, he became the majority owner. Just five years later, a major hike in his net worth happened, and he joined the billion-dollar mark (according to Forbes). Guess what else happened that year? The league was set to sign its next media rights deal.

That deal would pay the NBA nearly $2.7 billion per year. Imagine how happy that must have made everyone. The teams get to expand their cap space; the players get heavier salaries and the league still manages to save a little extra something. So, win-win, right? Not exactly.

“It also hurt the players”: Rich Paul opens up about NBA media deals

When the NBA signed the new media rights deal with ESPN and TNT, no one expected such an astronomical jump from a modest $930 million to $2.7 billion. The tactical and strategic marketing advancement of not just the sport, but also the players globally, is definitely a lucrative point for broadcasting conglomerates to demand exclusive broadcast rights. And that’s what the endgame here was.

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The 2015 deal created a 30% spike in salaries alone. Though the league shared the revenue with the players, it created a lot of differences in opinion and a more than few disgruntled players. Speaking to Mathew Belloni in his podcast, LeBron‘s agent, Rich Paul explains how it affected their mindset.

“It also hurt the players. When the big spike came, guys who thought shouldn’t have got the kind of money, got the money … from a player perspective, they were confused as to why it wasn’t happening to me.” 

You can imagine how well that went over. It’s almost like expecting a bonus for a lucrative deal you would have brought in. Or the extra credits you expect anytime for putting in double work at school/college. But everybody gets the same hike or the same grade despite your hard work.

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Either way, as Rich Paul says, with every business, because the NBA is ultimately a business that revolves around basketball, there will be “perks and challenges”.