In June 2022, NBA star LeBron James became a billionaire. Like many other achievements in his life, this one also had a peculiar element to it: no other active NBA player had achieved the billionaire status before.
King James’ journey to massive wealth started when he was getting ready to enter the league. At the age of 18 James had the foresight, financial wisdom and long-term outlook that is necessary for financial success in life. In his book about LeBron James, Jeff Benedict shares the interesting story of how three major companies, Reebok, adidas AG (OTC:ADDYY) and NIKE, Inc. (NYSE:NKE), were trying to woo James, who was just 18 at that time, to sign a deal with them. The biggest test for James came when Reebok put their $100 million offer on the table but LeBron James’ advisers still recommended him to decline the offer. Think about it. An 18-year old whose family had hitherto lived on food stamps and debt was offered $100 million but he’s asked to decline the offer. James did not resist his advisers and declined Rebook’s offer because he knew his actual worth even before he’d entered the league.
“He Knows What’s About to Come to Him”
To plug Benedict’s words:
LeBron was at a loss for words. He’d just flown in from Akron. He lived in the projects. Their subsidized rent was around $22 a month. His mother was unemployed and had to pay for groceries with food stamps. The check in his hand offered an escape from all of that. It was an instant ticket to a new life. All he had to do was say yes. Gloria was ready to walk out with the check. Goodwin wanted everyone to take a beat. Reebok’s offer was off the charts. And Fireman had made a bold move by putting $10 million on the table. But this was a preemptive bid, one that was intended to preclude LeBron from talking to adidas AG (OTC:ADDYY) and NIKE, Inc. (NYSE:NKE). Goodwin reminded LeBron that the game plan was to meet with all three companies before deciding. Fireman (Reebok CEO) and his team were disappointed. But they couldn’t help being impressed. Todd Krinsky (from Reebok) looked on in amazement as LeBron left Reebok’s headquarters that evening. He’s a man already, Krinsky thought. He knows what’s about to come to him.
Another testament to James’ financial wisdom comes from the story of his acquaintance with Rich Paul, who later became his agent. LeBron James came to know Paul when he hadn’t even entered the league, at the age of 17. When James started his agreement with Cleveland Cavaliers in 2003, he hired Paul for a salary of $48,000 which he thought was an “investment” for the future. New Yorker quotes James as saying:
“I have always felt that he had a purpose, and that’s why I kept him around. I knew he was going to be something more than even what he thought he could possibly be at the time. It was just a feeling I had.”
Precisely this ability of spotting opportunities before they become ripe is what made James a billionaire at the age of 37.
Another important strength of LeBron James is his ability to keep the right people on his side while making key decisions in life. In addition to Rich Paul, other important people who played a role in important business decisions of James include Maverick Carter, who James made sure had a seat on the table while making deals with giants like NIKE, Inc. (NYSE:NKE) and Reebok when he was entering the league.
The biggest headstart for LeBron James obviously came when he signed a deal with NIKE, Inc. (NYSE:NKE) back in 2003. The $90 million deal spanning seven years gave James $10 million at signing. After that wealth just kept coming for King James. It’s also important to note that Reebok was offering James more than NIKE, Inc. (NYSE:NKE) ( a whopping $25 million more), but James, yet again, played a master stroke by going with NIKE, Inc. (NYSE:NKE) as he knew that having Nike on his side would open many new opportunities for him later. That’s exactly what happened. A 2014 report from GQ said James made $300 million from LeBron 11 trainer shoes alone.
Another obvious source of his wealth was NBA, where he remains the highest-paid player with an estimated earnings of $528 million.
In the rest of the article, though, our focus would be the companies and specific investments which gave a significant boost to James’ wealth.
LeBron James Investment Portfolio: How He Became a Billionaire
In this article, we take a look at some of the companies that played a key role in LeBron James’ path to wealth building and financial success. We picked companies which had/have partnerships with LeBron James, the ones in which he’d invested in and those which he started and later sold.
LeBron James Investment Portfolio: How He Became a Billionaire
10. Tonal
In 2021, LeBron James joined Home gym equipment company Tonal as a brand partner and investor. Tonal was founded back in 2015. It has struggled to live up to the hype since its valuation has dropped to between $550 million and $600 million from a whopping $1.6 billion seen in 2021, according to a Wall Street Journal report. Tonal recently raised about $130 million in fresh funding from its existing investors. Tonal also announced a leadership change. Its new CEO will be Krystal Zell, who previously served as president of the company.
In addition to LeBron James, some other notable figures who have invested in Tonal in the past include Stephen Curry and tennis star Serena Williams. Amazon.com, Inc. (NASDAQ:AMZN)’s Alexa Fund was also a Tonal investor.
In 2021, LeBron James bid farewell for The Coca-Cola Company (NYSE:KO) after 18 long years as he came on board with PepsiCo, Inc. (NYSE:PEP). James’ deal with PepsiCo, Inc. (NYSE:PEP) was initially about the company’s Mountain Dew’s new energy drink line. However, PepsiCo, Inc. (NYSE:PEP) said that the partnership will span a variety of products and segments, including the snacks category.
PepsiCo, Inc. (NYSE:PEP) has been a notable donor to curb racial problems in America. PepsiCo, Inc. (NYSE:PEP) has over the past few years donated millions of dollars to different organizations working for related causes.
PepsiCo, Inc. (NYSE:PEP) is also one of the most notable investments of elite hedge funds. Out of the 943 hedge funds tracked by Insider Monkey as of the end of the first quarter of 2023, 70 hedge funds had stakes in PepsiCo, Inc. (NYSE:PEP). The biggest stakeholder of PepsiCo, Inc. (NYSE:PEP) during this period was Terry Smith’s Fundsmith LLP which owned a $1.2 billion stake in the company.
8. Epic Games
Epic Games, the American video game company behind Fortnite, in 2021 bought a minority stake in LeBron James’ media company SpringHill Co. along with NIKE, Inc. (NYSE:NKE), RedBird Capital Partners and Fenway Sports Group.
Interestingly, LeBron James is reportedly a big fan of the Fortnite game and the game also features a special LeBron James skin. The skin allows players to dress their character in the Nike LeBron shoes and also shows different famous items from LeBron’s trademark outfit.
7. Beats
LeBron James’ lucrative proceeds from his investment in Beats is an embodiment of his business foresight. Back in 2008 when hardly anyone knew about Beats Electronics King James had invested in the audio products company in exchange for a small stake in the company. All he had to do was to promote the product by wearing Beats headphones publicly. Fast forward to 2014 and Apple decides to buy Beats Electronics for an eye-popping $3.2 billion. Guess who had a payday? According to some reports, King James made about $30 million as a result this Apple’s acquisition.
LeBron James’ friend Kendrick Perkins has also claimed that James made a $700 million from Beats. In an interview, Perkins said:
“The crazy thing to me about LeBron James is that he is the chosen one in life,” said Perkins. “I tell him all the time ‘I really hate you. I hate you!’ And he’ll be like ‘What you mean, Perk?!’ ‘I hate you because everything you touch turns into gold!”
Partnerships between King James and NIKE, Inc. (NYSE:NKE) date back a long time and spans a variety of areas. NIKE, Inc. (NYSE:NKE) signed James in 2003 even before he entered the league. In 2015, NIKE, Inc. (NYSE:NKE) signed a lifetime deal with LeBron James. Some reports claim the deal was valued at anywhere between $500 million to $1 billion. The biggest face of their partnership is LeBron James signature NIKE, Inc. (NYSE:NKE) shoes. NIKE, Inc. (NYSE:NKE) also invested in James’ media company SpringHill Co.
Hedge fund sentiment for NIKE, Inc. (NYSE:NKE) jumped in the first quarter. Insider Monkey’s database of 943 funds shows that 81 hedge funds reported owning stakes in NIKE, Inc. (NYSE:NKE) as of the end of March, up from 71 funds in the previous quarter.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
