On “Billionaire” Athletes, Part II: LeBron James
Is he worth $1 billion? An investigation... (No.)
Earlier this week, I suggested that being a “billionaire” is not about what you make, but what you own. As such, professional athletes—even elite, highly-paid ones—are not going to become billionaires, because they are workers, not owners.
But some people would resist that conclusion. Some people are very committed to the idea of class mobility under capitalism, and so they firmly believe that workers, if they are Good Enough, can BECOME owners, and therefore become billionaires. And the go-to example, for many people, is LeBron James.
Last month, Forbes magazine bestowed billionaire status on LeBron James, announcing in a headline that he was “officially a billionaire” for the first time, as if he were being knighted or something. This would be a big deal—especially since, unlike other supposed “billionaire” athletes, he seems to have reached this level while he was still playing, suggesting that workers CAN become billionaires.
So, we should look into it. Here’s how the magazine breaks it down:
—30% ($300 million) from partial ownership of The SpringHill Company
In 2020, LeBron James and his business partner Maverick Carter consolidated their production company, marketing agency, and media platform for athletes into one company, known as SpringHill (after the apartment complex in Akron where James grew up). James’ precise equity stake in SpringHill is unknown, although Forbes reports it as less than 50%. Then last year, James and Carter sold a share of the company to investors at a deal that valued that company at $725 million.
Of course, if you look at the investors, they are all people who were already in business with LeBron James: Nike and Epic Games, for whom James is already a sponsor, and Fenway Sports Group, of which James is a co-owner. So, really, what you have here is a bunch of businesses that already pay LeBron James funneling money to him in the form of investment in his company, rather than labor income or capital distributions. But this is pretty standard capitalist stuff, so I guess we ought to accept this $300 million number.
—9% ($90 million) from partial ownership of Fenway Sports Group
This feels somewhat straightforward: The Fenway Sports Group, which owns the Boston Red Sox, the Pittsburgh Penguins, and Liverpool FC, is valued at ~$9 billion. LeBron James supposedly owns ~1% of it, so it’s just basic math, right? Well, I would caution against accepting the reported equity shares. There’s really nothing to verify this, and celebrity owners often own far less than the media reports suggest (Jay-Z owned 1/15th of 1% of the Brooklyn Nets; even Derek Jeter only owned ~4% of the Miami Marlins while serving as the team CEO).
Also, you might notice that we’re double-dipping: It was an investment from Fenway Sports that drove up the value of SpringHill. But, ok, fine, we can grant this one too.
—8% ($80 million) from real estate: a $10 million Akron home; a $23 million house in Brentwood; a $36.75 million mansion in Beverly Hills.
In case you missed the math here: 10+23+37=70, not 80. Presumably someone at Forbes has a calculator. But maybe they are adding an extra $10 million on renovations he’s doing in Beverly Hills? Or maybe they just think ownership by LeBron automatically increases the value of property by 15%? This all seems rather speculative, but I guess they know what they’re doing…
Also, notice how Forbes does not deduct anything for debt he might carry on these homes (or, for that matter, any debt at all that James might carry). And maybe LeBron paid cash for all these homes (seems like that would be financially stupid, but he can certainly afford it), but does Forbes know that? Or are they just trying to get the highest number they plausibly claim?
—3% ($30 million) from partial ownership of Blaze Pizza
OK, this one I was really skeptical about, as I’d never even heard of Blaze Pizza. But apparently it was the “fastest-growing chain in North America” as recently as 2017, when a private equity investment valued the company at $250 million.
Still, I remain skeptical. When that investment was announced, a spokesman for Blaze told ESPN that they wanted to hit 1,000 stores and $1 billion in sales by 2022. Then last year, they told reporters they wanted to have 800 stores open by 2025. In reality, they seem to have about 350 locations and ~$30 million in annual sales. And yet Forbes has INCREASED the value imputed to it five years ago, when its ambitions were much bigger.
It seems to me that there are several possibilities here. Maybe someone at Brentwood Associates, the private equity firm that made the investment in Blaze, decided that an easy way to curry favor with LeBron James would be to make a modest investment in his pizza startup that allowed the company to claim a high valuation and generate good publicity. Or maybe Blaze Pizza is on its way to taking over the world, making us all wonder what pizza was like before the rise of Blaze. Maybe. And it’s only 3% of the total, so let’s give him credit for this.
—50% ($500 million) in “Cash and other investments”
Apparently, “Forbes still believes James has more than a half-billion dollars in net assets beyond what’s listed above.” But this isn’t a CIA report on weapons of mass destruction in Iraq—you can’t just assert your beliefs without any evidence. And yet Forbes is doing that for HALF of LeBron’s supposed net worth.
This is where you lose me. I mean, what kind of sloppy work is this? The magazine got halfway through the assignment, couldn’t get the answer it wanted, then scribbled “Miscellaneous” in the margins and called it a day. What more proof do you need that “billionaire” is just a vibe?
Or, at least, propaganda.
It is propaganda in the basic sense that it is hype for LeBron James, who has made economic ascendency a key part of his brand; being crowned a “billionaire” is one of his biggest off-court achievements. But it’s also propaganda in the larger sense that it presents “net worth” as something that can be objectively measured by Forbes (indeed, by granting itself the role of the Official Billionaire Counter of American capitalism, that magazine bestows legitimacy on both its own “journalism” and the concept of a “net worth”). Finally, it is propaganda in the sense that making LeBron James a billionaire suggests that even someone from humble beginnings can become a billionaire through hard work and talent.
Perhaps the most telling thing is how eager people are to believe this obvious bullshit. The numbers here literally do not add up, and yet this Forbes story was picked up uncritically by dozens of mainstream media outlets. People just desperately want to believe that you can work your way up the economic ladder.
And, in a very crucial sense, you can: LeBron James IS extremely wealthy. He has more money than he or his children could ever reasonably spend. For many people, that is the entire appeal of being a billionaire, and LeBron James has it, so what’s the difference?
But under modern capitalism, there is an entirely distinct category of wealthy person, who differ from people like LeBron James not just in degree but in kind. These people—the Jeff Bezoses, the Elon Musks, the Bill Gateses, etc.—are wealthier than LeBron not because they make more money than him, but because they own the means of production. This grants them not just wealth, but a degree of political, economic, and social power that someone like James just doesn’t have—to say nothing of the average worker. Socialism is about attacking THAT disparity, not simply getting mad at rich people. We can socialize the means of production, and still pay LeBron James very well. He just won’t ever be a billionaire…