LeBron James makes a lot of money. But even he needs a big pile of cash sometimes.
In 2018, a company James controls took out almost $300 million from two life insurance firms in the Midwest. Guggenheim Partners, the big investment firm, arranged the whole thing. The money came through an entity with a fitting name: King James Funding.
Here is how the deal works. The insurers bought bonds tied to James's future earnings. Not his Lakers salary, but the money he makes outside basketball, like his lifetime endorsement deal with Nike. James gets cash today, and the insurers collect interest over time.
The bonds are due in late 2049 and carry a 4.8% interest rate. That is a long time to wait for your money. But for an insurance company, steady returns over decades are exactly the kind of bet they like to make.
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James's Lakers contract in 2018 was worth $154 million. His borrowing from the insurers was bigger than that. That tells you something about how much financial firepower he has outside basketball.
The two insurers were North American Company for Life and Health Insurance and Midland National Life Insurance Co. Sammons has been telling investors that Guggenheim was the sole manager for its asset selection until 2021. Lately, Sammons has been reducing its ownership stake in Guggenheim's parent company.
The insurers started out holding almost $300 million of the bonds. By the end of last year, that had fallen to about $245 million as James paid some back.
James inked a $97 million Lakers contract extension in August 2022. At roughly the same time, the insurers purchased about $60 million in 34-year bonds carrying a 5.75% rate.
According to a spokesperson for James, a third party provided independent credit ratings for both deals, and the NBA fully approved the 2022 transaction. The spokesperson also said James had no affiliation with the insurers beyond those specific deals.
This kind of borrowing is not just for athletes. It is a financial structure called securitization, where future income gets converted into cash today. Anyone with a big, reliable income stream can potentially do this, but it's usually reserved for people with enormous earnings.
So when you hear about billionaires and their tangled finances, this is the kind of thing that's going on. James is leaving the Lakers for the 76ers, but this borrowing story is a reminder that the people you see on the court are also financial operators behind the scenes. For the rest of us, it shows how valuable a steady income stream is, and how insurers are always looking for ways to lock in returns for decades at a time.
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A big contract can become lasting wealth with consistent investing, and the Always Be Buying E-Book shows how