Beats By Dre deal gives LeBron James financial ties to Apple, Samsung


LeBron James has more to sort out business-wise this summer than merely whether to remain with the Miami Heat. His investment in Beats By Dre has paid off handsomely, as the audio company has been sold to Apple for more than three billion dollars in cash and stock. But that also leaves James with a quandary: he’s had a very public endorsement deal with Samsung for a few years now, and yet he just became a significant shareholder in Samsung’s chief rival, Apple. And this isn’t the typical financial investment, either.

Nothing says James can’t be a pitch man for Samsung’s Galaxy phones while also holding significant number of shares of Apple stock in his portfolio. But just three days ago Beats By Dre introduced a new line of PowerBeats 2 headphones which were co-designed by LeBron himself. That project was obviously underway since before the Apple acquisition happened. But if he continues his hands on involvement with Beats products under the Apple umbrella, will he conclude that he’s working against his own interests? After all, thanks to his cameo in Beats TV ads, he’s now technically appearing in ads for Samsung and Apple within minutes of each other on any given night’s television broadcast.

Apple, for its part, may be delighted that Samsung’s most visible pitchman in the sports world is suddenly an Apple guy by default. But how will Samsung view LeBron’s ongoing participation in the design of Beats headphones, if indeed those endeavors continue? Apple and Samsung have an unusual rivalry in that even as Apple continues to sue Samsung for all sorts of alleged patent violations, Apple still has a shrinking few of its iPad components manufactured in Samsung factories. But as the two companies work ever harder to dissolve what was once an alliance, LeBron may find himself needing to pick a side, if only to avoid being perceived negatively for seemingly pitching both companies simultaneously.

The good news for James is that, while this NBA season didn’t have the kind of outcome he had been hoping for, it is at least now officially over. That means a few months of him being more in the background when it comes to the public eye, giving him time to decide how he wants to navigate this suddenly tricky technology landscape even as he decides how to handle his basketball affairs.

The upside for him is that he’s made such a massive personal profit on his Beats investment (and for that matter his Samsung ads) that it gives him the kind of financial flexibility that he can do whatever he wants in terms of basketball teams. He can simply stay with the Heat and continue collecting his current salary, opt out and take less money to join another team who lacks the salary cap room to give him a maximum deal, or opt out and re-sign with the Heat at a lower salary so the team can use the extra cap space to bolster its sagging supporting cast.

On the tech side, what may ultimately lure LeBron to choose Apple is that with Beats he has the opportunity to be as involved with product design and development as he wants, while with Samsung he’ll never be more than a pitch man. Is that enough to turn him into an iPhone guy before next season begins? It seems he’ll have to choose a technology team this summer just as surely as he chooses a basketball team.

Will Stabley
Will Stabley is the Founder and Senior Editor of Stabley Times.
Will Stabley