LeBron James -- A $90M Bargain?

LeBron James- Jan. 14, 2003, game picture AP

You've probably heard of LeBron James, the Ohio teen-ager with the reported $90 million contract to endorse Nike basketball shoes. Many question whether any high-school player -- however great his potential -- could warrant such a deal.

But as CBS's Jim Axelrod reports, both Nike and the NBA's Cleveland Cavaliers are betting James is the next big thing.

Lebron James is as much a billboard as a basketball player, already sporting Nike logos on his clothes.

He's the Number 1 high school hoop star in the country and the Number 1 pick of his hometown, Cleveland.

"I know how to play the game of basketball,'' said James at a recent press conference.

James is also the newest star in Nike's constellation. And at a reported $90 million for seven years, a rather high-priced one.

"Anything less than great, anything less than superstardom, he will be considered a bust. That's how big the expectations are right now," says sports commentator Mike Francesa.

But let's clear up one thing. Before you say $90 million seems like an awfully big bet on an unproven 18-year-old high school senior who's never played a second of pro ball, listen to marketing expert Donny Deutsch.

"I think from a Madison Avenue point of view it's a great deal," says Deutsch.

Deutsch sees a star who's already sold out 20,000-seat arenas and cable TV packages and thinks "bargain!"

"When you break it down on a yearly basis, and you think about what the up side for Nike can be, a billion-dollar business just around this kid, I think it's a good deal."

Lebron James may be the 3rd coming. But look at the first two. Michael Jordan meant more than $2.6 billion in sales to Nike. Tiger Woods -- $1 billion and counting. If Lebron James is only a fraction as profitable, the deal for Nike is still a slam dunk.
  • Justine Blau

Comments

Follow Us

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.

On Twitter