Bringing the Heat

UPDATE (9:31 PM): It's official. LeBron James is heading to Miami.

"In this fall, man this is very tough. In this fall, I'm going to take my talents to South Beach and join the Miami Heat," James said on his announcement, dubbed The Decision, on ESPN.

No details were immediately given on James's contract, though an ESPN report from Thursday morning said the maximum deal the Heat could offer would be for five years and $99 million.

Whatever the team's owner, Carnival Chairman Micky Arison, is paying, it will likely be worth every penny. After all, his franchise just got a nice bump in value.

ORIGINAL POST: Although it's easy to get caught up in the amount of reporting on the subject of where LeBron James decides to play basketball, make no mistake that it will be one that could result in the movement of hundreds of millions of dollars.

James is scheduled to make his announcement live tonight on ESPN. The choice for the NBA superstar is whether to stay with his Cleveland Cavaliers or go with another team. Whichever way he goes, one thing is certain: James will become a much richer man. By some estimates, as much as $1 billion richer.

But he's not the only one who would be financially impacted. The teams that are in the mix for his talents also could see wild swings in their worth.

According to a blog entry on Forbes from Dr. Patrick Rishe, director of Sportsimpacts and an associate professor of economics at Webster University in St. Louis, Missouri, James' impact on the once-moribund Cavaliers is between $60 and $100 million.

Using Forbes' 2009 NBA franchise values, and the higher end of that range, should James sign with the Miami Heat, the current favorite, it would vault the value of the franchise from $364 million to $464 million.

Should he sign with the New York Knicks, the team would go from a value of $586 million to $686 million, jumping past the Los Angeles Lakers as the most valuable franchise in the NBA.

That could be the tip of the iceberg for New York. Rishe suggested to Crain's New York that James could add up to $150 million to the value of the franchise because of the increased value of Madison Square Garden Inc.'s MSG network and more lucrative sponsorship revenues to be brought to the Garden itself.

In fact, whether James signs with the Knicks or not, MSG has already felt the impact, as options interest in the publicly traded company have skyrocketed.

The Cavaliers would sink from a value of $476 million, currently fifth in the league, to around $376 million, putting them around 12th. It wouldn't give owner Dan Gilbert a good return on investment should he decide to sell the team, as he paid $375 million for the franchise in 2005.

Other growth opportunities for James could be an increased partnership with Microsoft, whose Bing "decision engine" has prominent placement on James' official website, not to mention the "decision engine" is one of the sponsors of The Decision.

Should James sign with Miami, he would reportedly leave upwards of $30 million on the table under a contract, as the Heat are also keeping Dwyane Wade and signing Chris Bosh to form a team of superstars. Wade and Bosh are also signing less-than-maximum deals to both lure James and leave more money for the team to fill out the roster.

Of course, this likely matters little to James. After all, it has to be easy to find ways to make up that money when you have Warren Buffett in your posse.

Finally, another place where James could see off-the-court growth in the checkbook is his LRMR Marketing, the mastermind behind tonight's ESPN LeBron infomerical. Another big-name NBA star, Chris Paul, has reportedly signed with LRMR to be his representative.

But, for now, America waits, with all eyes focused on the Boys & Girls Club of Greenwich, Connecticut, where James will make his announcement. Stay tuned.

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Rick Johnston is an associate editor of Portfolio.com.