LeBron James may get $30M in Apple's Beats buy

An article in ESPN, citing sources, said the 29-year-old is finalizing what could be the largest equity cash payout for an athlete in history.

By Benzinga Jun 12, 2014 2:28PM

Credit: © Joe Murphy/NBAE via Getty Images

Caption: LeBron James of the Miami HeatBy Bruce Kennedy


One of journalism's cardinal sins is "burying the lede," the act of putting a key piece of headline-making information too far down in a story.


Some financial writers are wondering if a recent ESPN posting deliberately buried the lede -- when it nonchalantly dropped a big business story in the middle of an article on NBA trade rumors.


ESPN ran the story in question on Thursday. While the story discussed player's abilities and possible lineups, it let loose the following tidbit of news regarding basketball superstar LeBron James (pictured).


Sources say the 29-year-old was finalizing what is believed to be the biggest equity cash payout for a professional athlete in history as part of Apple's (AAPL) recent $3 billion purchase of Beats Electronics. Sources briefed on the situation say James realized a profit of more than $30 million in cash and stock in the Beats sale after he had struck a deal to get a small stake in the company at its inception in 2008 in exchange for promoting its high-end headphones.


James' near-constant wearing of Beats headphones has certainly helped raised the brand's profile. But given Beats was created by hip-hop artist and producer Dr. Dre and Jimmy Iovine, chairman of Interscope Geffen A&M Records, the high-end headphones have seemed destined for profitability.


James, a longtime fan of Dr. Dre, also teamed up with the rap superstar to help create the company's Powerbeats product; earphones designed to be used during athletics.


James isn't the first high-profile professional athlete to set up an equity sponsorship deal.

Several years ago, ESPN noted that Dwayne Wade -- LeBron's teammate on the Miami Heat -- left the Jordan Brand of footwear, owned by Nike (NKE), for a deal with China's Li-Ning athletic shoe company.


But in LeBron's case, as Gail Sullivan pointed out in The Washington Post, the Beats deal means James will now be getting "$11 million more than he makes per year for doing what he does best, playing basketball."


More from Benzinga

5Comments
Jun 12, 2014 3:59PM
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now I see how james get those leg cramps. Its all that money in his pockets
Jun 12, 2014 2:44PM
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Lets hope hes smart with it and is putting the money away.  I think that he is smarter than a lot of professional athletes who make me cringe whenever I hear about them going broke.  I work extremely hard for my money, and putting away enough to even retire seems like such a daunting task.  Unfortunately unlike Lebron, I have no other hope.  To save, this is what I do:

1.I cut way back on eating out. I am having a year of putting away money hard, and food was a huge portion of my budget. I save about an extra $85 a week now, and eat healthier and better. Ditto for others if you spend a lot of money in bars.

2. I now put away the maximum amount in my 401K (4% for me) that my employer will pay into the plan as a match. It is free money and dumb not to do it. It was basically a raise I gave myself.

3. I need life insurance to protect my 2 daughters, but I got rid of a $305 a month whole life policy for a policy from LifeAnt insurance and now I only spend $18 a month. I save the difference to my Roth IRA account in vanguard funds. If you are unfamiliar with this and want to learn more watch shows or read articles from Suze Orman or Dave Ramsey sometime they basically recommend it multiple times every show.

There is no other choice for someone like me (almost 40) who wants to be comfortable in retirement.

Jun 12, 2014 7:14PM
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I could feel very ill if I spent 2 grand in a  month not to be mistaken for monthly, for myself much less 100 grand a month. whoa!
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Lebron is getting owned by a guy who entered the NBA before he even started high school. Stick to endorsements and sponsorships. The media made you, might as well take advantage of it while it lasts!
Jun 12, 2014 5:31PM
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A highly unusually TALENTED young man.  Somebody had enough sense to get him a very worthwhile financial advisor.  Congratulations kid,....good luck with the game.
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