Lebron, Inc.: The Making of a Billion-Dollar Athlete by Brian Windhorst

Ok, full disclosure here: I am an unabashed, unashamed, die-hard, loyal, ride-or-die Lebron fan. I am from Cleveland, and proud of it. Lebron delivered for us, time and time and time again, and I simply just can’t get enough of watching him play. But even more than his basketball skills — G.O.A.T, for those counting at home — I have always been fascinated by his life off the court, and his quest to become the first billionaire athlete has been enthralling to witness over the years. Windhorst has been covering Lebron since he was in high school, so not only does he have access to his inner circle, but he also has a unique perspective on his Lebron’s business acumen, and that of the “team” he has around him. Lebron made mistakes when he was younger but learned from them, grew from them, and now he is on track to be one of the wealthiest athletes ever, a man in the mold of Magic Johnson and/or Michael Jordan times 10, which is truly remarkable for a kid who grew up in near poverty and could have (perhaps should have) been another statistic. Just a really cool book and a really cool read.

• once when he was in miami lebron gained 7 pounds during a playoff game
• he’s left handed but plays right handed
• awareness of how he can use his celebrity and popularity to gain leverage in business transactions has fed his bottom line and enabled him to funnel money to charities he cares about without having to reach into his own pocket
• in high school he was offered 10M on the spot to sign with Reebok, he said no
• “you don’t think about the first check, you think about all of them”
• planning for the forty or so years after his career
• becoming a billionaire is a goal
• met Joe Marsh in Akron in 2001, Marsh Productions, rich guy locally
• marsh gave 100K loan to Eddie (his surrogate father) and his mom gloria over the next two years — 10% annual interest
• LeBron never signed anything though
• marsh sued james during his rookie season, but it was an oral contract arranged when he was a juvenile
• jury sided with james and he ended up repaying the loan with interest
• became acquainted with power and leverage for the first time
• nike = greek god of victory
• Lebrons friend Maverick Carter got an internship there; a nike exec identified Carter as an influencer in lennon’s life — wanted to establish a connection with lebron before he left high school
• “i have no special talent I am only passionately curious” = guiding principle for Carter
• lebron decided that carter would work for whatever shoe company lebron chose after high school
• Addidas wanted to sign him as well but there wasn’t a huge guarantee of money, which was promised at first; Reebok offered 100M
• Nike wanted him but didn’t want to make a bad business deal — spent hundreds of thousands on the pitch alone
• 70M guaranteed — not as impressive as Reebok’s offer
• reebok increased to 115M with bonuses and such
• lebron signed his first deal with upper deck for 6M at the same time
• lebron didn’t like Reebok shoes — dreamed of being in Nike commercials like MJ
• agreed to 7 year 77M deal guaranteed with 10M signing bonus
• Reebok flew out to seal the deal with lebron but didn’t get to sweeten after Nike’s offer
• left a ton of money on the table — ended up making significantly more on the deal with royalties, over 100M total
• most highly paid shoe pitchman other than Jordan — more than doubled Kobe’s deal and he hadn’t yet played an NBA game
• following day Reebok’s stock dipped
• valued legacy over an all out cash grab
• Vitamin water offered him a % of the company in 2003, ended up signing with Coke
• Coke bought vitamin water for more than 4B
• 50 Cent made between 60–100M when he sold his shares as part of the deal — learning experience for lebron
• difference between being an employee and being an owner in a brand
• taking a calculated risk on a young company could pay off
• Nike gave Carter a full time job
• Randy Mims became lennon’s right hand man, ten years older “road manager” (was a friend of lennon’s surrogate father) “player liaison”
• met rich paul cause paul sold throwback jersey’s, 4 years older than lebron — lebron wanted a few jersey’s and they formed a relationship
• Paul was also from a rough part of Cleveland
• connected with Jay Z — guy who took control of management, own record label, own clothing line, influencer attaching his name to sell brands
• influence could be monetized if handled correctly
• Carter represented lebron at fortune 500 meetings
• Carter lead future marketing deals
• 4 in lennon’s crew, started calling themselves the Four Horsemen
• Carter said no more frequently than yes, even on chances to put money in his own pocket — focusing on the long game
• LRMR Marketing was formed
• leveraging young players affinity for lebron and using his status as one of the games top players to create a way to get in on the ground floor
• mistake though by chasing other athletes to manage — learned another lesson
• started Spring Hill productions — named after a housing project where lebron moved with his mother when they were finally able to get a stable home
• LRMR created the lebron summit — execs wh worked with him in various endorsement deals were brought together for two days of meetings in an attempt at corporate brainstorming
• Nike, Coke, Upper Deck, etc
• lebron was on the cover of GQ, Vogue, mens health
• access to the media coincided with the projects they were trying to publicize
• Carter became more well known
• small tiff with Gisele on the cover of Vogue — weird pose that some said mimicked age-old photos of King Kong grasping the blond haired Fay Wray — racist and/or insensitive
• More Than a Game was produced, a documentary with a guy who filmed Lebron his senior year — some random college student who sat on the film for years trying to figure out what to do with it
• film focused on basketball and lebron — story of friendships and struggles of the five teenagers
• toronto international film festival won second choice in the peoples choice award — first was Slum-dog
• Jess itzler of Marquis Jet introduced Lebron and Carter to Paul Wachter — major influencer for the future, dealmaker, created partnerships and companies that added hundreds of millions to their net worth
• Wachter was an i banker, connected with Schwarzenegger at one point (Arnold was a huge real estate investor with the money he made in bodybuilding contests, was already a millionaire by the time Conan the barbarian came out)
• Wachter took on Arnold as a client — then went to work for Arnold and founded Main Street Advisors in Santa Monica
• Arnold was an early investor in Planet Hollywood, had equity in the business by lending his name
• Wachter had a small client list, but some names — Bono, Jimmy Iovine, Tom Werner — preferred long and strong relationships, just like lebron
• also introduced lebron to warren buffet
• finding partnerships was much more fulfilling than simply taking a check for doing an endorsement
• control over what was happening with the business
• getting equity and the pathways that celebrity could create
• lebron loved cycling — started a bikeathon in Akron to raise money
• they invested in Cannondale, a bike company, which was then sold and they made millions
• authenticity principle — invest in companies they believed in and liked
• Iovine and Dr Dre started beats by dre in 2006
• Iovine became an producer and investor in more than a game, the movie
• Carter told Iovine about the new “economy” in the NBA, where players had become fashion plates when they arrived and departed venues
• lebron was on team usa in 2008 — gave headphones as gifts to all the players who wore them in China
• de facto walking billboards for the company and thanked lebron
• Wachter became a beats board of director, later helped put together a deal that made lebron a partner in beats — small % of ownership
• 2014 — beats sold to apple for 3B
• lebron made 50M
• personal relationships, long term thinking, leveraging value
• More Than a Game had a huge release planned all over the world — celebrity storytelling, demand, partners to make a project — didn’t make money but they learned
• 250 per year deal with Microsoft, % of profits of EA Sports/2K Sports — equity and control
• second deal with Nike — 8 years, 100M, and royalties
• 2010 — annual endorsements neared 40M
• Tiger Woods’ press conference after he had his infamous car accident and was exposed by his wife was staged at the PGA Tour headquarters and media members had to watch it on a live feed — managing a major announcement
• 2010 lebron was a free agent, wanted to use announcement to raise money for charity
• low moment in career, The Decision, set them back years
• somewhat ahead of its time, athlete empowerment, controlling the message, aged well in a sense
• changed the way business was done — athlete handled a transactional announcement through a controlled media experience
• 4M guaranteed for the boys and girls club in the TV announcement
• so focused on what they could do that they didn’t fully consider whether they should do it
• no energy in room, tension, which spread to viewers
• tone deaf — anticipation of the reaction was as big of a misread as lebron made in his life
• 2.5M was given to more than 59 boys and girls clubs across the country — partnership with HP helped get a thousand new computers into clubs
• that news was lost in the moment, got buried because of the nature of the interview
• lebrons q rating went down after this — but not in the black community
• foundational concept matched what they had hoped would happen
• signed with Fenway Sports Group — they would pitch lebron to make marketing deals and would pocket a percentage
• Carter got a % of Liverpool FC — trading ownership in a sports team for marketing rights
• swiss luxry watchmaker Audemars Piguet — international marketing pact
• Lebron and dunking deal by FSG — pitch dunkin and baskin robbins in China, Taiwan, South Korea, India
• Dunkin’s leveragted lebrons popularity in asia, and lebron got a seven figure international deal
• by 2018, Liverpool was valued at 1.9B — lebron and maverick’s stake was worth more than 30M
• lebron and carter in business with producer Tom Werner — Blaze Pizza along with Maria Shriver, Patrick Schwarzenegger
• “brand ambassador” for Blaze
• Starz purchased Survivors Remorse, a TV show from Spring Hill — lebron would just influence the show
• met and hired Adam Mendelsohn, who had been Schwarzenegger’s deputy chief of staff
• Spring hill was no able to receive pitches to make shows and not just try to create them
• Becoming on Disney XD with ESPN, CNBC Cleveland Hustles, NBC The Wall
• 2014 — lebron came back to cleveland and announced his decision in SI — major magazine and website allowed lebron to take control
• letter “I’m Coming Home” was like a political speech, an announcement followed by a platform
• Uninterrupted — created as a digital platform in media that would allow athletes to do what lebron had just done — deliver a message uninterrupted that could be easily shared via social media
• Carter recruited and signed a number of high profile athletes and gave them ownership stakes in the new platform, and they contributed video testimonials — Gronk, Rousey, Draymond
• videos showed up on Bleacher Report and Turner Sports
• Trainwreck came out in 2014 — critical and audience acclaim for his role
• multiplatform agreement with warner bros for Spring Hill
• Turner Sports and Warner Bros combined to invest 15.8M in Uninterrupted to fund the expansion of staffing and projects
• full fledged content operation that Carter had built with Lebron as the vehicle
• Space Jam 2 — Lebron and carter as executive producers, Lebron will star
• lebron family foumdation was losing money over the years
• but then partnered with State Farm because of their program called 26 seconds — named because studies showed that every 26 seconds a child dropped out of school
• in 4th grade lebron missed more than 80 days of school because of instability at home
• with a stable support system, routines, accountability, he had perfect attendance in 5th grade
• directly reach into the lives of at risk children, children like him
• 2012 — lebron left the sidelines on politics after Trayvon Martin — wore a hoodie with Miami before a game — political impact has far outpaced MJ
• in Akron — third grade was a time when a child was behind in reading and mat that their chances to graduate high school plummeted
• I Promise program — “I promise to never forget where I came from”
• 2016 — foundation was giving out more than 3.5M per year in grants
• leverage name and fame
• deal with U of Akron — U of Akron would provide full 4 year ride to those who got through the I Promise program, up to 200 free rides
• 2018 — I Promise school was opened, 240 children in third and fourth grade, demand to get in was so intense that a lottery system was used
• donated 2.5M to museum of african american history in DC for an exhibit on Ali
• Rich Paul started Klutch Sports agent in 2013
• Spring Hill in 2018 had more than a dozen shows on the air, in development or production
• functioning production house that didn’t have to have him on the screen to get a project made
• Uninterrupted moved into new offices in Hollywood
• small empire looked to be viable into the future
• Lebron looked at playing years as only a fraction of the time he intended to make an impact on the world
• signed with LA in 2018 as a business decision
• postion to profit if all the parties can manufacture a hit
• Space Jam 2 — could make or break Spring Hill
• 2018 — Forbes estimated that lebron had earned 765M
• regularly earning more than 30M per year with Nike
• wants to be an owner
• also launched a supplement business with Schwarzenegger
• take advantage of fame, control and craft image, leverage position as long as he is in demand\