The LeBron James bond deal came to light this week — and it explains how the world’s highest-paid athlete quietly turned decades of future income into hundreds of millions of dollars in cash, years before anyone knew about it.
Here’s what happened. In March 2018, months before LeBron signed with the Los Angeles Lakers, a company he controls called King James Funding borrowed almost $300 million from two life insurance companies in the American Midwest. The deal wasn’t backed by his NBA salary. It was backed by everything he earns off the court — most notably his lifetime endorsement deal with Nike. The loan doesn’t come due until 2049, and it stayed completely unreported until insurance industry records surfaced this week (Bloomberg). A second, smaller round — about $60 million — followed in 2022.
This kind of deal has a name: securitization. In plain terms, it means taking a stream of money you expect to receive in the future and turning it into a lump sum of cash today. You give up a slice of that future income to investors, and in exchange, you get the money now instead of waiting decades for it to trickle in.
It sounds unusual for someone already earning hundreds of millions of dollars. But wealthy people borrow for reasons that have nothing to do with needing cash to pay bills — tax planning, investment opportunities, or simply preferring liquidity over waiting. The strategy isn’t new, either. Decades ago, musician David Bowie sold bonds backed by future royalties from his own music catalog — the deal that gave the whole category its nickname, “Bowie Bonds.” Athletes and entertainers have increasingly followed that playbook since, selling off pieces of their future earnings the same way a company might sell bonds backed by its future revenue.
The bigger lesson for any investor: a “loan” isn’t always what it looks like from the outside. Anyone — a person, an athlete, a government — can turn a future paycheck into present-day cash. The real question is never whether you can do it. It’s what you give up in exchange, and whether the terms are worth it.
Not advice. Just how I see it.