LeBron James has informed the Heat that he will exercise the early termination option in his contract, making him an unrestricted free agent on July 1.
James, 29, joined Miami in 2010, signing a six-year, $109.8 million deal that included options to end the contract after the 2013-14 season and the 2014-15 season. By opting out, James is walking away from $20.6 million next season and $22.1 million in 2015-16.
Of course, his earning potential -- should he want to maximize his salary -- is significantly greater than the $42.7 million he's temporarily leaving on the table. Miami now has the ability to offer James another five-year contract worth $127.7 million, while outside suitors can offer him four-year deals worth $94.8 million.
James' opt-out decision isn't primarily about money, though. By taking this route, James has maximized his flexibility and his leverage. He can now survey all of his options -- potentially meeting with suitors like he did in 2010 before "The Decision" -- and even indirectly "reconstruct" his contract by taking a pay cut.
“I was informed this morning of [James'] intentions," Heat president Pat Riley said in a statement. "We fully expected LeBron to opt out and exercise his free agent rights, so this does not come as a surprise. As I said at the press conference last week, players have a right to free agency and when they have these opportunities, the right to explore their options. The last four seasons have been historic and LeBron James, Dwyane Wade, Chris Bosh and Erik Spoelstra have led the Miami Heat to one of the most unprecedented runs in the history of the NBA. We look forward to sitting down with LeBron and his representatives and talking about our future together. At the moment, we are preparing for the opportunities in the draft and free agency as we continue with our goal of winning NBA championships.”
Together, James, Wade (2014-15 option worth $20.2 million) and Bosh (2014-15 option worth $20.6 million) were going to make more than $61 million next season, which is nearly the entire salary cap for three players. Filling out a roster capable of competing with a team as deep as the Spurs with that little flexibility is more or less impossible, and would require a host of quality players willing to take veteran's minimum contracts. If James and/or Miami's other stars agree to new, less-lucrative contracts, the Heat would be in position to use cap space to compete for players in free agency, as their contract obligations are minimal aside from their trio of stars.
James teamed up with the 32-year-old Wade and the 30-year-old Bosh to make four consecutive Finals trips from 2010 to '14, winning back-to-back titles in '12 and '13. Those titles represented the first championships of James' illustrious career, which began when the Cavaliers selected him with the No. 1 pick in '03, and he earned NBA MVP and Finals MVP honors in '12 and '13.
During Miami's most recent title run, James sidestepped questions about his future, although he did say that his family "loves" living in Miami.
"I will deal with my summer when I get to that point," James said after Game 5 on June 15. "Me and my team will sit down and deal with it. I love Miami. My family loves it. But obviously right now that's not even what I'm thinking about."
James averaged 27.1 points, 6.9 rebounds, 6.3 assists and 1.6 steals while shooting a career-high 56.7 percent last season, earning All-NBA First Team honors for the seventh straight year. He was asked to do even more to compensate for a reduced workload for Wade, who played just 54 games in an effort to remain fresh for the postseason, and the offseason departure of Mike Miller. After San Antonio's commanding victory in the Finals, James acknowledged that Miami would need to significantly rebuild its roster to keep up.
"I don't think it's just the Spurs, it's the whole league," he said. "The whole league continues to get better every single year. Obviously we would need to get better from every facet, every position. It's just how the league works."
Riley pledged to reporters last week that he would "retool" Miami's roster in an effort to extend its window as a title contender, while urging his core of star players to remain in South Beach.
"This stuff is hard," Riley said. "You've got to stay together if you've got the guts and you don't find the first door and run out of it. ... This is four years now into this era, this team. Four Finals. It's only been done three other times before. Two championships. From day one, to the end, it was like a Broadway show. It sort of ran out of steam. We need to retool, we don't need to rebuild. We need to retool, and that's what we're going to do.
"It's up to us and myself to be able to go out and operate within these [salary cap] rules, to retool and complement those players," the longtime executive said. "We've been able to do that the last couple of years. There's no reason to think that we can't again. ... I guarantee you there will be other players who want to come down here. Who they are, we'll find out."
All 30 teams covet James, who has won four of the last six MVP awards, and surely a number of them will make pitches. In 2010, James sat down with the Knicks, Clippers, Bulls, Cavaliers, Nets. In recent months, rumors have linked most of those teams, along with the Lakers and Rockets, to interest in James this time around.
However, Miami remains the favorite to re-sign James. In addition to its desirable market and Florida's tax advantages, the Heat boast a proven executive in Riley; a coach in Spoelstra who guided James to his first title; and the possibility of extending the Big Three era, which has delivered on its 2010 hype. Before falling to San Antonio in the Finals, the Heat breezed through the Eastern Conference playoffs with a 12-3 record. In four years, Miami has dominated its conference opponents, going 48-16 (.750) against the East in the playoffs.
Last week, oddsmaking service Bovada gave the Heat 1/3 odds of signing James, compared to 7/2 odds for the Cavaliers, 13/2 odds for the Bulls and Rockets, and 15/1 odds for the Lakers.