November 28 2007: 7:13 AM EST
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LeBron Inc. (page 3)

The building of a billion-dollar athlete.

By Tim Arango, Fortune writer

Overall, he has about $170 million in sponsorship deals. In this figure is the $90 million from Nike, $15 million from Coke, $6 million from Upper Deck, $4.5 million from Bubblicious, and $7.5 million from Cub Cadet. His deal with MSN included $3 million upfront, and the partners will soon begin a phase in which Microsoft and LRMR will share advertising revenues sold on MSN's LeBron site - 60% for LRMR and 40% for MSN.

While James is LRMR's core business, the goal is to diversify by representing other athletes. Right now they have only one other client. In August the company signed a contract with Ted Ginn Jr., the Ohio State star and a rookie wide receiver on the Miami Dolphins. (The firm is interested in becoming a boutique sports and marketing agency, but James will always be client No. 1.)

As a marketing firm, the company also has done projects for Cannondale, the bike company in which LeBron himself owns an equity stake; Sprite; and accessories company Judith Lieber. These days Carter is less interested in straight endorsement deals than in equity stakes in the companies with which LRMR works.

One newly inked deal is a kind of Facebook for young athletes. James is one of a handful of athletes who will receive equity. The site is an online community, and the other sports stars involved are Derek Jeter, Peyton Manning, Philadelphia Phillies slugger Ryan Howard, and the San Antonio Spurs' Tony Parker. The venture is backed by the hedge fund Pequot Capital, the talent agency Creative Artists Agency, and Major League Baseball Advanced Media, the league's Internet arm.

"We're kind of in stealth mode," says Steve Hansen, the former COO of GeoCities, who will run the company. The site is scheduled to launch in April.

"He should be looking at multiyear deals with a vested interest," says Doug Shabelman, the president of Burns Entertainment & Sports Marketing. "He'll probably be in a position to take some ownership stakes." Shabelman added that if LRMR develops a stable of athletes, it could package them in deals for marketers. In other words, if you want LeBron, you gotta take the others.

The Road to $1 Billion

If last season's postseason pyrotechnics are a harbinger of future play, it's certainly possible for James to approach the level Jordan held in pop culture or the post-NBA business success of Magic Johnson, whose net worth has swelled to a reported $800 million through various entrepreneurial ventures that include real estate and theaters.

But for James to get there, according to Carter, the public must become enchanted with his off-the-court persona. According to research conducted earlier this year by LRMR, among 13- to 17-year-olds, the only current athlete with a higher favorability rating than James is Peyton Manning, the Indianapolis Colts quarterback who won the Super Bowl last year. (Jordan and Larry Bird also ranked higher.)

Among the top NBA players, James ranks highest for endorsement potential, ahead of the Miami Heat's Dwyane Wade and the L.A. Lakers' Kobe Bryant.

Yet he ranks lower when measured by "sophistication" and "accessibility." During a presentation of the data at the summit, Chris Gebhardt, a consultant who conducted the research, says, "They simply do not have as positive an image of LeBron as they do of sports celebrities who have married on-field performance with off-field personality, such as Tiger, Peyton, or Michael. We need to do a better job of appealing to the consumer side of these fans, to start telling the nonbasketball story."

Off-court James has been in a long-term relationship with his high school sweetheart, Savannah Brinson; the two have not married, and together they have two children - LeBron James Jr., 3, and Bryce James, 5 months.

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