LeBron James is determined to become the first billionaire athlete in the history of American sports. This goal is the centerpiece of his recent return to northeastern Ohio for the remainder of his career. It is also a goal that is too small for his brand. LeBron has to think beyond Dave Bing and Magic Johnson and Shaquille O’Neal. Here’s one way he can do it.
Where previous athletes have moved to maintain a substantial income (over $200,000) during the years of their retirement with solid investments and part-time jobs with organizations connected with their franchises, LeBron understands that he can become one of the largest industries in Ohio for the rest of his life. He will likely earn more than $500 million dollars over his playing career from both his basketball contracts and his endorsements. Even after taxes and inflation, with a tenth of that amount in secure, stable investments like Treasury notes, indexed bond funds, and money market accounts, he and his descendants will never need to work for anyone else again.
So, then, what could he accomplish with approximately another $150 million as an investment trust in Ohio. At the minimum, he could substantially redesign multiple neighborhoods in metropolitan Cleveland. By diversifying this pool of assets between real estate, infrastructure, and emerging industries, LeBron would substantially outperform the best business minds in the history of American entertainment. Even with a small recurring commitment to these investments (approximately $7 million annually), LeBron would average rates of return above 18%. In good years, his ROI could far exceed that level. In other words, his initial $7 million investment in 2025 could net him more than $6 billion in 2065. That first billionaire goal is far too small. Just his first decade of effective investment takes him into the category of Bill Gates, Warren Buffett, and the Walton family – each worth tens of billions of dollars.
LeBron is far more than a global brand and regional entertainment industry for northeastern Ohio over the next decade. He is a walking, talking, autonomous, private sector, New Deal for the entire state of Ohio. More importantly, he has the chance to blaze this trail in a way that makes it possible for hundreds of other athletes and entertainers to follow. Instead of waiting decades between the emergence of Bing Steel and Magic Johnson Industries, 6-10 prominent athletes could follow LeBron’s example annually, even starting with smaller amounts of capital. Careful, diversified, digital and industrial investment in cities like Newark, Detroit, Oakland, Savannah, Charleston, Jackson, and New Orleans can enrich these former athletes, while addressing the most persistent racial disparities in American history. Closing the unemployment gap, the education gap, the wealth gap, the healthcare gap – these are the kinds of goals the broader perspective LeBron showed in his essay to Sports Illustrated should serve. He cannot do it alone, and it is work that will persist into the fourth century of the American republic. In the twenty-second century, however, these decisions could be the foundation for a just, open, world economy.
Unlike anyone before him, LeBron has opened the door for the possibility. With his growth, we are no longer witnesses. We can all be free.
Dr. Walter Greason is the Chief Executive Officer of the International Center for Metropolitan Growth (www.icmetrogrowth.com) and the author of Suburban Erasure: How the Suburbs Ended the Civil Rights Movement in New Jersey. His work is available on LinkedIn, Twitter (@worldprofessor1/@icmgrowth), Facebook, and by email (email@example.com).