Lebron Inc. by Brian Windhorst is about how Lebron has built his business empire from his Freshman year in St. Vincent St. Mary’s in Akron in 2001 (tk verify Lebron high school freshman year) to his new team Los Angeles Lakers in 2019. Brian Windhorst has been following Lebron since 1999 so he is one of the few well known sports media people that has been following Lebron literally his entire career, and even before that.

Lebron is my favorite athlete and one of the most influential people on modern culture. I have a lot of respect for all of the things he does off the court, from I-Promise schools to Uninterrupted, to how he posts on Instagram #tacotuesday, I am totally here to #WitnessGreatness. I am also super observant about how aware he is both on the court and off the court.

I was really excited to read this book. First, a quick story about how I was even able t get this book:

Lng story short the only library that had this book was in another province on the other side of the country so I got an interlibrary loan. I had even forgotten about it when I got an email saying “your book is ready for pickup”. This is why I think that Public libraries are the greatest human institution ever created. Though, I had to return the book before I finishd reading it because I kept getting distracted and didn’t have enough time to finish reading it before the deadline.

High School Years

• Lebron grew up extremely poor, the neighborhood he grew up in was actually at the bottom of a hill and they called it “the bottom”
• So many people made a lot of money off Lebron and whenever he tried to make some for himself, people would hound him
• Very funny how things come full circle becasuse he is currenlty in California and is advocating a bill to allow student-athletes to be able to profit from their own likeness.

Nike, Reebook, Adidas and the Race to Sign Lebron, The Genius of Lavar Ball

• Fascinating story about Adidas, Nike and Reebok’s competing to sign Lebron [23]
• Reebok offered Lebron the most money ($100 millin)
• Nike offered $88 million seven-years $77 million with $10 million bonus [51]
• Adidas also made a bid but pulled out because their representative, Sonny Vacharo offered too much money, he quit shortly after that
• reminds me of my private equity class [tk link note] where we talk about wether or not to invest in a company and my professor always says: “the easiest thing to do is not invest”
• I also think of it in terms of very often with investing: you either win big or it goes to zero
• Either it was a great investment and any amount you paid was a great deal or it is a flop and any amount you paid was too much
• It seems strange to me that Adidas would pull out of a deal because they didn’t think Lebron was worth $100 million
• I’m not saying hindsight: I’m saying as long as the valuation is within the same order of magnitude, it shouldn’t matter too much
• It’s pretty funny that Nike offered Lebron about $10 million less but he still signed with Nike, because he wasn’t just think about the upfront money, he was thinking about the backend. Thinking long term about who would provide the most opportunity in the long-term.
• Lebron in 2018: “Signing with Nike, is the best business decision I’ve ever made” [55]
• I contrast Lebron’s decision to sign with Nike decision to Zion Williamson signing with Jordan in 2019. I think Zion signing with Jordan was not the best business decision for him. Outside of Michael Jordan’s retro shoes, Jordan shoes don’t really sell well, maybe that will change now that they have Zion.
• Reminiscent of a talk I am working on called “Age of the SuperHuman [tk add link toa rticle, put this in section about Lebron and media company and leverage]
• Nike has a line in its annual report called “Demand Creation Expense” [44]
• This is a catchall term for all endorsement, marketing, advertising related expenses
• Nike usually keeps that number around 11 to 12 percent of revenue
• So if they offer Lebron an $85 million contract, they expected to make about $850 million
• I’ve always said that despite how large the contract amounts seem, businesses offer you that much because they know they can make at least double that
• I never knew that they expected to make 10 times what they offered you!
• Though to be fair,$850 million is a big business, most people including Adidas CEO Herbert Hainer, and Nike CEO, Phil Knight were unsure if Lebron could generate that much revenue
• This makes me appreciate Lavar Ball more, what he did with Big Baller Brand is the right thesis, their problem was simply the execution
• I anticipate another athlete to follow the Big Baller Brand blueprint but with better execution, then other athletes will follow
• SUperstart athletes have significant leverage, owning their own sports brand is a smart move for the top 5 athletes in most sports
• Also signed a multi-year package Upper Deck for $6 million [49]
• His rookie contract was $4 million
• This is lowkey a very important statistic, that Lebron is making off the court 3 times what he’s making for actually playing the game
• Really goes to show that in modern society (and perhaps its always been like this), attention is the most valuable asset
• I talk about this in the age of the superhuman [tk link to talk]
• Amazing story about how 18-year old Lebron turned down a million cheque from Reebok
• The crazy part was all this was hapenning while him and his mom were still poor, how many 18-year olds would turn down that kind of money
• His rational was “If this is what Reebok is offering me, imagine what Nike and Adidas have to offer?”
• The story of how More Than a Game documentary was created [98]
• Lebron and Macerick Carter started a media company alongside their chilhood friends, using their initials in the ame LRMR
• Hosted The Lebron Summit, executives from Nike Coca-Cola, Cadbury Schweppes, Microsoft coming to Akron in the summer in a series of meetings for corporate brainstorming

Beats by Dre Payday and Paul Wachter

• “Just about every major move Lebron has made in the business world since 2005 has had at least some of Wachter’s fingerprints on it… It’s been one of the most rewarding relations of Lebron’s career” [111]
• Wachter Came from “straight East Coast blue blood” background, MBA from Wharton, Law degree from Columbia [112]
• One thing led to another and he went from corporate law at New York powerhouse Paul, Weiss and co. then met Arnold Schwarznegger
• Saw an opportunity to connect businesses with entrepreneurs, entrepreneurs get equity in business, businesses can use celebrity for marketting
• Wachter helped broker Lebron’s meeting with Warren Buffett
• Wacther also brokered deal that allowed Lebron and Maverick to buy a stake in a bicycling company, Cannondale that was bought by a private equity company, Pegasus Capital advisors
• When Pegasus sold Canondale to a Canadian conglomerate, Pegaus quadrupled their money, Maverick made six figurs and Lebron made seven figurs [118]
• Particularly interesting to me because right now I am taking a class called private equity ( you can see my course notes here) [ tk add course notes link] So it’s cool to see how private equity affects different industries
• In 2006, record industry was being disrupted by streaming and Jimmy Iovine and Dr. Dre were loking for ways to make money [121]
• Dr. Dre suggested shoes, Iovine suggested speakers, they settled on headphones
• Iovine “had allways been a marketting genuis” but he didn’t have a marketting budget
• Wachter approached Lebron to market the Beats headphones and Lebron invested in Beats
• The 2008 summer olympics, Lebron encouraged the US mens’ basketball team to weat the headphones and they invited other athletes to wear it
• When athletes were walking into their games, press interviews, they were often spotted wearing Beats’ headphones, all without having to pay expensive sponsorship fees to International Olympic Comittee
• And without paying the athletes either! All it cost was some free headphones
• In early 2014, Apple bought Beats for $3 billion, with Lebron getting a check for $50 million, the second biggest business deal of his career after Nike [126]
• Especially interesting for me because I remember Beats being VERY popular when I was in elementary and high school, didn’t realize that this is how they became so popular
• Fun story about Lebron at Allen & Compant Sun Valley Media conference, an event I have been absolutely fascinated by and lurk the photos from the events every year. The goal is to attend one day, bookmark this. [130]

Lebron Goes to Miami and Media Savvy

• February 2010, Tiger Woods had a press conference to address his cheating scandal [141]
• Lebron and Maverick Carter were studying how he handled the press conference:
• Restricting the access of the press
• Doing it during a slow news cycle
• Making sure that him hugging his mom, was directly at the right camera angle in front of the camera
• They were studying what is the best way to deliver certain pieces of news in the media, especially his upcoming free agency decision
• Very interesting story that even back in 2010 Lebron wanted to play in Los Angeles
• Didn’t want to play with Donald Sterling who was widely disliked in the league ( this was before the racism scandal in 2014)
• The plan was for them to get Stering to sell,
• Lebron raise $4 million for his The Decision announceement
• Speaks to a recurring theme in this book of how Media savvy Lebron and his team is
• Athletes often get complimented for their physical greatness, I don’t think they get enough credit for how smart some of them are.
• In fact in most sports, I follow (at least, Soccer and Basketball) the top 5 players are usually incredibly smart and have very high EQ: Cristiano Ronaldo, Lebron James, Kobe Bryant, Giannis Antetokumpo
• Funny story about how The Decision leaked, and Kanye West happened to be in New York, found out where Lebron was and came to visit him
• “The news was out quickly… But social media was in its infancy in 2010-in fact, Lebron didn’t join Twitter until that very week- and the news moved slower” [155]
• Lots of interesting anecdotes in the book: The Author, Brian Windhorst got a text from Cavs owner Dan Gilber saying that he had been told Lebron was going to sign in Miami and encouraged Windhorst to publish that information to “undercut the show” [156]… “I had only about 30,000 twitter followers in those days” (shoutout to Brian for being an early adopter for Twitter, feels like a lot of media people were, 30k followers on twitter in 2010 is no joke) [tk how many does he have now?]
• Brian points out that when Lebron said “taking my talents to South Beach” that’s exactly what Kobe said (taking my talents to) in 1996 when he was announcing that he was going straight from high school to the NBA [157]