LeBron James Would Give Up $US30 Million If He Went Back To Cleveland

The biggest impediment to LeBron James returning to the Cleveland Cavaliers in free agency this summer is financial.

Because of the NBA’s new collective bargaining agreement, LeBron has a heavy incentive to re-sign with Miami if he exercises his early termination option on his contract this summer, which he is widely expected to do.

He would leave nearly $US30 million on the table if he left Miami.

Here’s a comparison between the maximum contract Miami can offer and the maximum annual contract Cleveland can offer (we’ll get into the gritty details below):

Under NBA rules, a free agent who re-signs with his own team can get a five-year contract with 7.5% annual raises.

A free agent who signs with a different team can only get a four-year contract with 4.5% annual raises.

In each scenario, LeBron would make 105% of his 2013-14 salary in 2014-15 (which works out to $US20.1 million). But the Heat can give him a $US1.5 million raise every year after that until 2019, while the Cavs can only give him a $US900,000 raise every year after that until 2018.

In all likelihood LeBron would still sign a new contract for maximum dollars in 2018-19 if he decided to bolt for Cleveland. But that fifth year isn’t a guarantee if he leaves.

It’s also important to understand why LeBron is opting out of his contract and becoming a free agent this summer.

He isn’t doing it because he wants to leave. He’s doing it because he can get a longer, larger contract if he opts out and re-signs with Miami as opposed to signing an extension while still under contract.

He can sign a five-year deal with the Heat as a free agent if he opts out, and a four-year deal with the Heat if he signs an extension.

Yes, LeBron will technically be free agent this summer. But you shouldn’t take that as a suggestion that he wants out of Miami. It’s strictly procedural.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.