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When LeBron James signed up to lead the Los Angeles Lakers to NBA glory with a $154 million contract in 2018, it wasn’t the biggest deal he did that year. Just months before he joined, a limited liability company he controls borrowed almost $300 million from a pair of Midwestern life insurers advised by an arm of Guggenheim Partners, according to insurance industry records reviewed by Bloomberg. The previously unreported bonds, which are due in 2049, were structured to provide immediate cash to James and backed by a stream of future revenue tied to his earnings outside basketball such as a lifetime Nike Inc. sponsorship, people with knowledge of the matter said. The burst of lending began before Guggenheim leader Mark Walter started acquiring the storied basketball team. In an abrupt turn this month, the billionaire mogul agreed to sell the Lakers amid a federal probe into parts of his business empire. There’s no indication that the loans to James have anything to do with those inquiries. Athletes and artists are increasingly using future earnings like royalties and licensing deals to structure deals that help them unlock immediate capital. David Bowie was famously the first recording artist to go to Wall Street to tap the future earnings of his music, paving the way for a thriving market for esoteric securities. The “transactions were a securitization done by Mr. James with his personal, non-NBA salary, assets and income which is a very common financial structure for an individual with this level of earnings and assets,” a spokesperson for James said. “Both transactions were independently credit rated by a third party and the 2022 transaction was fully approved by NBA,” James’ spokesperson said, noting the athlete had no affiliation with Guggenheim, Sammons, North American Co. or Midland National beyond their participation in the transactions.

Bloomberg