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From RealGM: By Christopher Reina

The minute LeBron James becomes a free agent, deciding against exercising his player option with the Cavaliers in order to sign a four-year extension, he will be leaving money on the table.

If LeBron were to exercise his player option and then sign an extension on July 8th, his total five-year salary would be $103,752,925 between 10-11 and 14-15.

Assuming LeBron does want the experience of free agency and ultimately re-signs with the Cavaliers on a six-year deal, the experience will give him an extra season of guaranteed money, but it will cost him also cost him a total of $3,511,035 over the first five years.

Should LeBron sign outright with a new team, he can only sign a five-year contract for $96,099,60, which would mean a total of $4,142,220 less over the first five seasons of his contract than he would earn by signing an extension.

If LeBron chose to sign a three-year contract in order to maintain his influence over the personnel decisions of his team, he also would then receive full Bird status if he were with a new team, whereby his raises would then begin to be 10.5% instead of 8%.

One important thing to note is as soon as LeBron becomes a free agent, he will make $16,568,908 for 10-11 regardless of where he signs and would make only $414,222 more in 11-12 if he re-signed with Cleveland and $822,444 more in 12-13. The significance of the raises becomes more pronounced Year 4 ($1,242,666 more) and Year 5 ($1,656,888 more).

The equations here are under the assumption there are no changes to the existing CBA, which is unlikely considering how tempestuous all sources expect negotiations to be over the next year. Because of the potential of a new CBA to restrict salary, it would be financially prudent for LeBron and all other members of the free agent class to avoid signing three-year deals.

What is unquestionably clear, the decision of LeBron and Dwyane Wade to actively become free agents even if they intend to re-sign will be an experience that costs them at least $1,923,813 (three-year contract with current team scenario). Of course if they re-sign for a six-year deal after becoming a free agent, the number increases to $3,511,035.

The numbers below also apply to Wade and Chris Bosh.

Exercise Player Option, Extension with Cavaliers
10-11: $17,149,243
11-12: $18,949,914
12-13: $20,750,585
13-14: $22,551,256
14-15: $24,351,927
Five-Year Total: $103,752,925
Five-Year Average: $20,750,585

Decline Player Option, Sign With Cavaliers
10-11: $16,568,908
11-12: $18,308,643
12-13: $20,048,378
13-14: $21,788,113
14-15: $23,527,848
15-16: $25,267,583
Six-Year Total: $125,509,473
Six-Year Average: $20,918,246

*Five-Year Total: $100,241,890
*Five-Year Average: $20,048,378

Sign With New Team Outright
10-11: $16,568,908
11-12: $17,894,421
12-13: $19,219,934
13-14: $20,545,447
14-15: $21,870,960
Five-Year Total: $96,099,670
Five-Year Average: $19,219,934

Chris Reina is the executive editor of RealGM. Follow him on Twitter at http://twitter.com/cr_reina.

Read more: http://basketball.realgm.com/src_wiretap_archives/67085/20100608/free_agency_to_cost_lebron_wade_at_least_$19m/#ixzz0qJBmC2js

Even for rich athletes, that would make no sense.

Moonangie wrote:Hmm, doubt I would spend $3-4 mil just "to find out". I'd make up my mind one way or the other and proceed with purpose in that direction. Even to Lebron, that ain't chump change or a bartender tip, or something to leave on the table and wave goodbye to.

Well the data provided is misleading, because by opting out, if he then resigns with the Cavs, he gets a sixth guaranteed year at a higher annual average. I wouldn't really call that a loss of money, because the guarantee has a lot of value. If he were to opt out, then only sign a 5 year contract with the Cavs, he'd lose money, but of course, that won't happen.

The situation that has him actually losing money is if he decides to sign with a team other than the Cavs.

Also, to say you could make up your mind without first doing your due diligence and research seems like a poor reason. We're talking about 3% of his salary. $3 million sounds like a lot, but it's relatively much less severe to a $100 millionaire.