One of the biggest sports stories in Miami of the last few years was basketball player LeBron James’ decision to sign a contract with the Heat. Although he is only three years into his five-year contract, there are already questions circulating about what James will do next.

Since James began playing with Miami, the team has been dominant — and the current season is no different. When players and owners signed the most recent collective bargaining agreement, however, there were new rules that will make it much more costly for the Heat to hang on to their biggest stars. A “repeater tax” that would be applied for re-signing top players, such as James, could make it less feasible for the team to extend another offer in a couple years.

In addition to the issues surrounding the collective bargaining agreement, James’ contract has an early termination option. This means that he could opt to enter free agency in 2014, even though his contract runs through 2015. If the Heat are feeling the pressure of new league policies and the salary cap, James could choose to play for another team that is willing and able to offer him a larger contract.

Even though rumors are floating, choosing to be a free agent doesn’t necessarily mean LeBron will be leaving Miami, it just might mean he is looking for a new contract.

Of course, the approaching early termination date will continue to create speculation among local sport fans. At the same time, this story establishes a number of important points about the intricacy of professional sports contracts. Not only are they structured with complex clauses for entering free agency, but they must also be negotiated with the terms of the league’s collective bargaining agreement in mind. This is why it’s important for athletes to seek advice that will help him or her receive a contract designed to facilitate the achievement of professional goals.

Source: ESPN, “LeBron James’ next decision,” Brian Windhorst, March 20, 2013

  • Our firm has experience helping athletes navigate the complexities of signing a contract. To learn more, please see our Miami contract negotiations page.