All The King's Men: The LeBron James Version of 'Entourage'
AKRON, Ohio (AdAge.com) -- It's an "Entourage" moment. Four young guys from the neighborhood -- a superstar earning millions of dollars and the three buddies he employs -- clown around at a photo shoot, trading good-natured insults, roughhousing and laughing out loud, pausing only temporarily to let the star's stylist get in among them and straighten his jacket.
"'Entourage,' huh? Do you know how many times we get that?" says Maverick Carter, childhood friend of the NBA's biggest star, LeBron James, and CEO of LRMR Marketing, the sports-marketing firm they formed along with pals Randy Mims and Rich Paul.
But this is no HBO show. This, potentially, is a billion-dollar business.
"Michael Jordan had a 15- to 20-year run with Nike and developed a huge business that is probably worth $500 [million] to $600 million," said Lynn Merritt, senior director of basketball sports marketing at Nike, and the guy who tracked LeBron from his earliest years in high school. "The state that LeBron comes in with now, with the internet and all kinds of technological advancements that weren't around when Michael was at his peak, well, LeBron could be the first billion-dollar athlete in all aspects."
The king of sports marketing is dead. Long live The King.
Four Horsemen no more
They no longer wish to be known as the Four Horsemen, the nickname they gave themselves years ago growing up in Akron, 45 minutes south of Cleveland, and the nickname used -- sometimes derisively -- in the media.
They're older now. Mr. James is still the baby of the bunch at 21. Mr. Carter is 24, Mr. Paul is 27 and Mr. Mims is 30. The Four Horsemen seems almost childish, and with the way they were taken to task some 15 months ago, the last thing they want is to appear immature or irresponsible.
When Mr. James fired agent Aaron Goodwin, the collective jaws of the NBA and the sports-marketing world dropped. The well-respected Mr. Goodwin had negotiated Mr. James' celebrated $90 million contract with Nike. Then Mr. James did the almost unthinkable in the sometimes stuffy world of sports marketing -- he handed his off-the-court businesses and marketing over to Messrs. Carter, Paul and Mims.
"Let me guess," wrote one sports columnist on AOL last year. "A few years from now, when LeBron needs knee surgery, he'll have his plumber do the job. When he needs his taxes done, he'll hire Mike Tyson."
Sports marketing summit
On a sultry July day on the campus of the University of Akron, where LRMR is holding a sports-marketing summit, surrounding itself with big-hitting partners such as Coke and Nike, and seeming every bit a slick outfit, they can laugh about the quote. In May of 2005, it stung.
"People thought we were idiots or something," Mr. Mims said.
"In the beginning, no one was giving us a chance," Mr. Paul said. "But it's a new day. Sports marketing in 2006 is different, athletes are different and the way people perceive athletes is different."
The friends had a vision and a strategic plan. More importantly, they had Mr. James as owner, client and active participant.
Mr. James -- who has a pretty quick wit among friends but seems remarkably humble for a guy who just signed a three-year, $60 million contract extension with the Cleveland Cavaliers -- said he learned a lot off the court during his first two seasons in the league.
Wants to make the decisions
"The direction I went in the beginning -- I won't say they were bad decisions. I got a lot of good things out of my situation," he said. "But I wanted to wake up in the morning and say I did it my way. I'm not being cocky and saying it's my way or the highway; I just wanted to make the decisions."
He and his friends also wanted a new type of sports marketing. Rather than endorsements, he wanted partnerships. Sure, he still wanted, as he put it, "wealth," but he also wanted people who would get to know him and work with him in ways that would show a real understanding of LeBron -- the person and the brand.
"They're going to make it client-centric, as opposed to brands writing checks against endorsement sponsorships," said Mitch Kanner, founder-CEO of 2 Degrees Ventures and an adviser to LRMR Marketing. "They're going to create a more unified message around the brand with partners so that everybody gets what they need."
After the split with Mr. Goodwin, Four Horsemen Management was formed and gave way to LRMR Marketing. The company retained its endorsement deals with Nike, Coca-Cola, Bubblicious and Upper Deck trading cards, and enhanced a relationship with Microsoft.
It hasn't added a single marketer to the roster of Brand LeBron since the split with Mr. Goodwin. But the four say they've been taking their time and performing their due diligence on future agreements with potential partners.
But so have the potential partners.
"A lot of LeBron's deals that are in place now were Aaron Goodwin's doing," said one marketing executive who has had conversations with Mr. Carter but did not want to be identified. "We have to do our homework too. I will say this, though: So far, I like what I hear."
Mr. Carter said when he, Mr. Paul and Mr. Mims began looking at existing sports-marketing efforts, it was fragmented and, in large part, driven by three entities -- athlete, agent and brand -- that were simply "looking for a commission."
LeBron James the brand
"There needs to be more innovation and more creativity in the partnerships that are formed," Mr. Carter said. "In the '80s and '90s, sports marketing and endorsements were catchphrases. We need partnerships. For some athletes, there may not be a partnership. It may not fit. But for someone like LeBron James, his brand, like Michael Jordan's, will live on."
"It's not about the number of the sponsors or the number of opportunities," Mr. Kanner said. "It's whether the [potential] brand works with the LeBron brand first, and what the long-term strategy is going to be between both."
In some respects, LRMR is less sports-marketing firm and more advertising agency. Just as an ad agency likes to fill category gaps -- we need an airline, we need a package-goods account -- Messrs. Carter, Paul and Mims have talked about aligning Mr. James with certain brands, such as a high-end car and a financial-services company.
"In building a brand, the stronger the brand you deal with, the stronger your brand will be," Mr. Mims said.
Mr. Carter and Mr. James both said their goal was not only to work with their partners but to have their respective partners work together. For instance, Mr. James is in Los Angeles this week to shoot a new commercial for Nike as part of the "Meet the LeBrons" series. This time, the spot will portray him as "Business LeBron." At one point in the commercial, Mr. James, dressed in a business suit, high-dives into a pool. The dive is so good there is no splash of water and Mr. James emerges from the pool still dry. (According to one Nike exec, it was Mr. James' idea to come out of the pool with his suit still dry and pressed.) Microsoft is helping promote the spot with a financial investment and by showing it on Windows Live.
The ultimate goal is 08/08/08. August 8, 2008, is the day the U.S. Olympic team arrives in Beijing for the Summer Games. By then, LRMR wants to have turned Mr. James into a global icon, building partnerships with global companies.
That is a lofty goal, said expert David Carter, principal of Sports Business Group in Los Angeles and executive director of the Sports Business Institute at the University of Southern California. He said Mr. James still has to work on his game -- on and off the court -- before approaching Mr. Jordan's iconic status.
'Extraordinarily ambitious statements'
"Although LeBron is quite polished at an early age, those are extraordinarily ambitious statements about making him a global icon," Mr. Carter said. " LeBron has what Jordan lacked at the height of his career -- greater ease of penetrating foreign markets. LeBron has tremendous potential and he has global business development on his side, but he has a long way to go before becoming Jordan-esque."
But don't think LeBron hasn't thought about how he makes those improvements and capitalizes on that global potential. At the LRMR summit, Mr. James, who jumped from high school to the NBA, was invited by the president of the University of Akron to stay in his hometown and use the school to earn his degree. Mr. James is not only considering the idea but is mulling taking Mandarin classes in order to speak the language when he arrives in China.
That's just one example of the plan to turn Mr. James into the next Pele or Muhammad Ali. At the summit, representatives from Nike, Coke, Microsoft and more all brainstormed about how to pull it off.
One of the more intriguing ideas was "Go Inside."
"Go Inside" would be the linchpin of a social-responsibility effort that was started by Mr. James and his James Family Foundation in Akron, where his charitable efforts have been well documented.
"These guys have impressed me," said Joanne Bradford, Microsoft VP-global sales and marketing and chief media revenue officer, of LRMR. "I like that they're not greedy. It's not about the money. You heard LeBron himself say that. He has enough money just from the NBA and Nike. Yes, his partnerships will make him money and make money for whatever company he's working with. But I believe them when they say it's about strategy and long-term relationships."
Not everybody believes that, however, and not everybody believes it will be easy to turn Mr. James into a global presence in 25 months.
"I'm a big proponent of the academic notion that 'we don't know what we don't know,'" said Ernest Lupinacci, CEO of Ernest Industries and formerly a creative who worked on the Nike and ESPN accounts. "Personally, I don't know that in two years when the Beijing Olympics take place [that] the dynamics of sports, marketing, culture, information, etc., won't be very different than what they are today. As marketing people should be well aware, it is becoming harder and harder to aggregate a majority. Just ask the networks."
Mr. James insists he won't be overwhelmed.
"I think I've grown as an individual and a businessman," he said. "The opportunities I have in front of me, in order for us to make that happen, I wanted to pull the train."
"We'll be all right," Mr. Mims said.
Then he paused a moment, smiled and added: "You have to make sure you do your homework so you don't end up getting compared to plumbers and Mike Tyson."