Thursday, July 8, 2010
The Impact of Taxes on Lebron James' Decision
Business & Media Institute, LeBronomics: Could High Taxes Influence James' Team Decision?:
While sports reporters have sought agents and teammates for the inside scoop on where NBA superstar free agent LeBron James will sign, there’s another person who may know The King’s next move: his accountant.
[Here are the projected state and local taxes on a five-year, $96 million contract:
- $12.34m: New York Knicks
- $10.32m: New Jersey Nets
- $5.69m: Cleveland Cavaliers
- $2.85m: Chicago Bulls
- $0: Miami Heat
Of course, the state and local tax treatment is much more complicated than these purported figures suggest. For a detailed discussion, see:
- Sports Law Blog, Lebron James and his Big Decision: Thoughts on Role of Endorsement Income Potential and State Income Taxes
- Tax Foundation, State Jock Taxes: Is LeBron Better Off in Miami?
https://taxprof.typepad.com/taxprof_blog/2010/07/lebrons-accountant-sign-with-miami.html
Comments
As John points out, the initial observation is half right. That is OK because under most law school curves, that would merit a B-. Bigger than his salary should be his endorsement potential. I well recall that in Jordan's early days on the Bulls he passed up salary so they could buid a championship team and in one of those years he earned about $3.5M as a Bulls salary and $37M from endorsements and other sources. That is where the real money is. Ask Tiger. But that is another story.
Posted by: Bill | Jul 9, 2010 5:24:14 AM
I was watching ESPN last night for the no-suprise announcement. James chose the Miami Heat. Of course, the reason was to win a championship...by joining the other good players who moved there for tax reasons, uh, I mean to win a championship, too.
As soon as I earn $20 million a year, I'm moving to Florida...and going to Disney World!
Posted by: Woody | Jul 9, 2010 7:51:10 AM