Basketball legend LeBron James was an immediate star: Coming from the Akron, Ohio projects to becoming a multi-millionaire straight out of high school. He could have been a millionaire in high school, though. Reebok offered him ten million dollars to not speak with Nike or Adidas and sign an exclusive deal.
Reebok wrote him a ten million dollar check on the spot. But James turned it away.
He explains why in this excellent interview with his longtime friend and business partner, Maverick Carter:
If [Reebok is] willing to give me a 10 million dollar check right now, what is it to say that Nike or Adidas is not willing to give me 20 or 30 up front. Or maybe the upfront money is not the biggest thing, you know. Maybe let's start thinking about the back end... never put all your eggs in one basket.
The next morning, he was back in his high school homeroom broke. Shortly after, his Reebok decision would make him hundreds of millions of dollars. Here's why.
Freedom of choice
Carter and even James himself still seem surprised at leaving money on the table (literally). But, as Carter points out in the interview, there is a difference between equity and money.
Your job gives you money. Your business gives you equity.
My co-founders and me bootstrapped our startup, Cuddlr. When we sold Cuddlr, each of us was cut a check based on our contractual ownership. That is equity.
As a teenager, James knew that Reebok was paying him not to have equity in himself. In an exclusive contract, the rising star would have closed doors he didn't even know existed yet.
Instead, he created his own businesses, managed his own brand and created relationships that made him an equal rather than a contractually-obligated employee. As my colleague Jeff Haden put it, "LeBron didn't make the easy play. He made the smart play."
You are worth a multiple of the money offered
James recognized being offered 10 million meant his brand was worth much more to the company. After all, the corporation is trying to make money. It will be gaining a multiple of whatever you are worth.
I was once offered a high-paying opportunity and, reflexively, I pushed for more. The organization told me straight up that it expected a 10x financial return on whatever it was paying me. The honesty was refreshing.
If someone is offering you a significant amount of money, then keep in mind that they expect to make a multiple of whatever they are offering you. It is a rule.
Your option, then, is to pull in that money (and then some!) through your own route. They accidently revealed what you are worth.
Everything is a partnership
Perhaps the most important lesson from the brief interview:
I think when we started to look at our endorsement deals as partnerships, that's when a lot of it started clicking for me. 'We're not just here to hold your product, or we're not here just to talk about your product. We're here to work with you.' ... and as we got more seasoned, I realized 'There's no reason why we can't start our own thing.'
He realized that his team had equal power to the corporations in which they partnered. Coincidentally, partnerships is the first section of my new book, Bring Your Worth: Level Up Your Creative Power, Value & Service to the World. Here's what I shared:
Know this: Gatekeepers themselves don't have security. Gatekeepers don't have the power anymore. They are our partners, your partners, as they should have been all along.
And after rejecting the $10 million, James did alright for himself: He is now worth an estimated $440 million.