Due 2049: What LeBron James's $300 Million Loan Actually Costs Him
Published on August 25th, 2026Written By: Dave Manuel
In February 1997 David Bowie sold $55 million of bonds secured on the future royalties of twenty-five albums, paid Prudential 7.9 per cent for a decade, redeemed them on schedule and got his rights back. He did it because he owned his own master recordings and because borrowing against them was not a taxable event, where selling them would have been. Twenty-one years later, while still under contract to the Cleveland Cavaliers and months before free agency would take him to the Los Angeles Lakers, a company controlled by LeBron James issued close to $300 million of bonds secured on his future off-court income, at 4.8 per cent, due 2049. Bloomberg reported the arrangement for the first time this week. It is lawful, it was rated by an independent agency, the follow-on issue was approved by the league, and it is one of the most elegant pieces of personal financial engineering in the history of professional sport. This file explains what was pledged, why none of the money was taxed on arrival, and who is actually carrying the risk.
Sports-King Feature
Bowie Bonds for Basketball
Three hundred million dollars, secured not on a basketball contract but on a lifetime of shoe money - and not a cent of it taxable on the day it arrived. How borrowing against yourself actually works.
Raised in 2018$300M
Coupon on the First Issue4.8%
Tax Due on ReceiptNone
Final Maturity2049
Every entry below is written as a certificate, because that is literally what changed hands: private notes, sold to two insurance companies, carrying a coupon and a maturity date like any other bond. Read them in order and the logic assembles itself - what was pledged, why the cash was not income, what the alternative would have cost, who bought the paper and why, where the idea came from, and what happens if the money the whole structure depends on does not turn up.
01
CERTIFICATE NO. 01MARCH 2018
King James Funding LLCAsset-backed notes in the principal amount of approximatelythree hundred million dollars
COUPON4.80%
MATURITY2049
TIMING ..... WHILE STILL A CLEVELAND CAVALIER
AHEAD OF ... FREE AGENCY, DESTINATION UNKNOWN
DISCLOSED .. NOT UNTIL AUGUST 2026
In March 2018 a limited liability company called King James Funding issued close to $300 million of asset-backed bonds. The coupon was 4.8 per cent. The final payment falls due in late 2049. The timing is worth pausing on: he was still under contract to the Cleveland Cavaliers, and the free agency that would take him to the Lakers on a $154 million deal was still months away. The insurers were lending nearly $300 million without knowing which city he would be playing in. The transaction was never publicly reported until Bloomberg described it this week, which is itself part of the story - this is a private market, and the whole point of it is that nobody has to announce anything.
02
SCHEDULE OF SECURITY2018
Future Off-Court RevenueSecured upon endorsement and business income, including alifetime relationship with Nike
PLEDGEDOFF-COURT
NOT PLEDGEDNBA SALARY
EXCLUDED ... THE PLAYING CONTRACT
WHY ....... THE ENDORSEMENTS OUTLIVE THE CAREER
This is the detail almost every summary of the story gets wrong. The bonds are not secured on his basketball salary. They are secured on future off-court income - endorsement and business revenue, most significantly a lifetime agreement with Nike. That distinction is doing enormous work. A playing contract is finite, injury-exposed and ends with the career. A lifetime endorsement, by definition, does not. A lender assessing a thirty-one year loan to a thirty-three year old athlete does not want the part that stops when his knees do. It wants the part that keeps paying when he is sixty. Which is precisely why the deal could be done at all before he had chosen a team: where he played next was, for the purposes of this security, close to irrelevant.
03
TAX TREATMENTON RECEIPT
No Taxable EventBorrowed money is not income, because it carriesan obligation to repay
CASH RECEIVED$300M
TAX DUENOTHING
THE REASON . A LIABILITY IS CREATED ALONGSIDE
THE INCOME . STILL TAXED WHEN IT ARRIVES
Here is the mechanism, and it is simpler than people expect. Loan proceeds are not taxable income. They never have been, for anybody, on any loan - because receiving money you are contractually obliged to give back does not make you richer in the eyes of the tax code. An asset appears on one side of the ledger and an identical liability on the other. So roughly $300 million landed in 2018 and no tax was due on any of it. The endorsement revenue that secures the bonds remains fully taxable as and when it is actually received, and that after-tax money is what services the debt through 2049. Nothing has been avoided. It has been rearranged in time.
04
COUNTERFACTUAL2018
If He Had Sold InsteadA sale of the income stream would have beenfully taxable in the year of sale
TAX EVENTIMMEDIATE
UPSIDE RETAINEDNONE
BORROW .... NO TAX NOW, UPSIDE RETAINED
DIFFERENCE STRUCTURE, NOT AMOUNT
The alternative was available and it is the one the market kept trying to build. He could have sold a share of his future endorsement income to investors. The cash in hand would have looked similar. The tax treatment would not: a sale is a realisation event, and the proceeds would have been taxable in 2018 at whatever rate applied. Worse, from his side, selling hands over the upside. If the Nike relationship turns out to be worth far more than anyone modelled, a lender still only gets 4.8 per cent and its principal back. A buyer would have got the lot. Borrowing keeps the surprise.
05
CERTIFICATE NO. 02AUGUST 2022
King James Funding LLCFurther notes in the principal amount of approximatelysixty million dollars
COUPON5.75%
TERM34 YEARS
ALONGSIDE .. A $97M LAKERS EXTENSION
OUTSTANDING ABOUT $245M AT END-2025
APPROVED BY THE NBA
Four years later he went back. In August 2022, around the time he signed a two-year, $97 million extension, the same insurers bought a further $60 million of bonds - this time running thirty-four years at 5.75 per cent. The rate had risen almost a full point, which is roughly what happened to interest rates generally between those two dates rather than anything about him. After partial repayments, about $245 million was still outstanding at the end of 2025. His spokesperson has said the 2022 transaction was fully approved by the NBA and that both deals carried independent third-party credit ratings, describing the arrangement as a securitisation of his personal, non-basketball earnings and a common tool among high-net-worth individuals. He holds no ownership stake in Guggenheim, in Sammons, or in either insurer.
06
THE BUY SIDE2018 AND 2022
Two Life Insurance CompaniesNorth American Company for Life and Health, and Midland National Life,both owned by Sammons Financial Group
THEY NEEDLONG DURATION
HE NEEDSLONG MONEY
WHY IT FITS . POLICY LIABILITIES RUN FOR DECADES
WHAT THEY GET A RATED, PREDICTABLE 31-YEAR ASSET
The choice of lender is not incidental. A life insurance company has obligations stretching decades into the future and needs assets whose payments arrive on a similarly long schedule. A thirty-one year bond paying a fixed coupon, secured on the endorsement income of the most marketable athlete of his generation and carrying a third-party credit rating, is a very good match for that problem. Both buyers - North American Company for Life and Health Insurance and Midland National Life Insurance Co. - are owned by Sammons Financial Group, and their portfolios were advised at the time by an arm of Guggenheim Partners. This was not a favour. It was an asset purchase.
07
PRECEDENTFEBRUARY 1997
Bowie BondsFifty-five million dollars secured on twenty-five albumsand two hundred and eighty-seven songs
COUPON7.90%
OUTCOMEREDEEMED
TERM ...... TEN YEARS
WHY POSSIBLE HE OWNED HIS MASTERS
ENDED ..... 2007, NO DEFAULT, RIGHTS RETURNED
None of this is new. In 1997 David Bowie raised $55 million - something over $100 million in today's money - against the future royalties of twenty-five albums and 287 songs recorded before 1990. Prudential bought the entire issue at a 7.9 per cent coupon over ten years. The structure worked precisely because Bowie, unusually for his era, owned his own master recordings. He could pledge them because they were his. The bonds were redeemed on schedule in 2007 with no default and the rights reverted to him. James Brown and Iron Maiden followed. Nearly thirty years on, an athlete pledging a Nike contract is running the same play.
08
FAILED STRUCTURES1998 ONWARD
Selling, Not BorrowingRepeated attempts to sell shares in an athlete's future earnings havestruggled to find a market
FRANK THOMAS1998, SHELVED
FANTEXUNDERSUBSCRIBED
2013 ...... SHARES LINKED TO ONE PLAYER'S EARNINGS
RESULT .... RAISED LESS THAN THE ADVANCE PAID OUT
PATTERN ... LENDING WORKS, EQUITY DOES NOT
The contrast with the equity version is stark and instructive. Frank Thomas tried to sell institutions a share of his future earnings in the late nineties and it went nowhere. In 2013 a company called Fantex floated shares tracking the future earnings of the NFL player Vernon Davis, then paid the receiver Mohamed Sanu $1.5 million for a slice of his brand income - and the corresponding offering failed to raise even half that. More recent ventures have sold fractions of individual contracts. The pattern across thirty years is consistent: investors will lend against an athlete and will not buy one. A bond has a coupon, a maturity and a rating. An equity claim on a human being has none of those and is very hard to value.
09
DEDUCTIBILITYANNUAL
Investment InterestInterest may be deductible against net investment incomesubject to strict limits
LIMITED TONET INVESTMENT INCOME
CARRYFORWARDPERMITTED
EXCEPTION .. INVESTMENT INTEREST, WITHIN LIMITS
CAPPED AT .. NET INVESTMENT INCOME FOR THE YEAR
EXCESS .... CARRIED FORWARD, NOT LOST
Borrowing is not free, and the interest is where the honest accounting starts. Personal interest is generally not deductible in the United States, but interest on borrowing used for investment purposes can be, limited to net investment income for the year, with any excess carried forward rather than lost. Whether and how much of a structure like this qualifies depends entirely on what the borrowed money was actually used for - and that is not public. What can be said plainly is that the deduction is capped, conditional, and nothing like automatic. Anybody presenting this arrangement as free money has skipped this entry.
10
THE ENDGAMEEVENTUALLY
Step-Up in BasisAssets held until death take a new cost basis at market value,and the accrued gain is never taxed
LIFETIME TAXDEFERRED
AT DEATHBASIS RESETS
BORROW ... SPEND WITHOUT SELLING, SO WITHOUT TAX
DIE ...... HEIRS INHERIT AT MARKET VALUE
THE DEBT . CLEARED FROM THE ESTATE
Zoom out and this is one move inside a much larger pattern that tax specialists call buy, borrow, die. Acquire assets that appreciate. Rather than selling them - which triggers tax - borrow against them to fund your life. Then, on death, the assets pass to heirs with their cost basis reset to market value, so the accumulated gain of a lifetime is never taxed at all. The estate can settle the borrowing by selling assets that now carry little or no taxable gain. It is entirely lawful, it is the reason the very wealthy so often report modest taxable income beside enormous fortunes, and a thirty-one year bond maturing when the borrower is sixty-four fits the pattern rather neatly.
11
OBLIGATIONTHROUGH 2049
The Part That Is Not OptionalThe coupon is fixed and payable whether or not the pledgedincome actually materialises
IF NIKE PAYSTHE DEBT IS SERVICED
IF IT DOES NOTSTILL PAYABLE
TERM ...... THIRTY-ONE YEARS, FIXED
RISK SITS WITH THE ATHLETE, NOT THE INSURER
And so to the part that gets lost when this is written up as a clever trick. A margin loan can be unwound by selling the collateral. This cannot. It is a fixed obligation running to 2049, and the coupon falls due whether the endorsement income arrives on schedule or not. He has bet that his off-court earning power over three decades comfortably exceeds the cost of borrowing against it - a bet that, given the Nike relationship and everything built around it, looks extremely sound. But it is still a bet, made at thirty-three, about what a man will be worth commercially at sixty-four. The insurers took a rated, secured, senior position. The residual risk stayed with the player.
The Two Issues
Everything publicly known about the borrowing, alongside the record it was modelled on.
| Issue | Date | Amount | Coupon | Term | Secured on |
|---|---|---|---|---|---|
| King James Funding | March 2018 | About $300M | 4.80% | To 2049 | Future off-court income |
| King James Funding | August 2022 | About $60M | 5.75% | 34 years | Future off-court income |
| Bowie Bonds | February 1997 | $55M | 7.90% | 10 years | Royalties, 25 albums |
About $245 million of the James borrowing remained outstanding at the end of 2025. The Bowie bonds were redeemed in full in 2007.
The Arithmetic
Sell the income stream, or borrow against it
This is the whole article in one image. The tax code does not ask how much money you received. It asks whether you have to give it back.
The Record Book
Why It Had To Be PrivateNone of this appeared in a public filing, and that is a feature rather than an oversight. Bowie's bonds were placed with a single buyer. These were placed with two. A private placement to sophisticated institutions avoids the disclosure a public issue requires, which is why the arrangement ran for more than eight years before anybody outside it knew the terms. The market for financing secured on future revenue streams is now enormous - industry estimates put it well above $780 billion globally - and almost all of it is invisible.
What a Rating Actually BuysBoth issues carried independent third-party credit ratings, and that detail does more work than it appears to. A rating turns a personal loan into a security an insurance company can hold against its policy liabilities and report on its statutory schedules. Without one, this is a bilateral loan to an individual and most regulated institutions cannot touch it at scale. With one, it is an asset. The rating is what makes the buyer possible.
The Guggenheim ConnectionThe portfolios of both insurers were advised at the time by an arm of Guggenheim Partners, the firm led by Mark Walter, who years later took control of the Lakers at a $10 billion valuation and this month agreed to sell at $12.5 billion. Walter's insurance businesses are meanwhile under scrutiny from the Justice Department and the Securities and Exchange Commission over more than $20 billion of loans to affiliated businesses, and Sammons has told investors it is reducing its financial ties to Guggenheim. All of which makes it worth saying flatly: the lending to James began before Walter had any stake in the Lakers, and Bloomberg reports no indication that these bonds are connected to that federal scrutiny.
The Rate Was the Market, Not the ManIt is tempting to read the jump from 4.8 per cent in 2018 to 5.75 per cent in 2022 as a verdict on his prospects. It is not. Interest rates rose broadly across those four years, and a borrower whose credit had genuinely deteriorated would have moved by far more than a single percentage point on a thirty-four year obligation. Read against the Bowie precedent the direction is the other way entirely: 7.9 per cent in 1997 against 4.8 per cent in 2018 says the market has become considerably more comfortable lending against a famous person's future.
Sports-King's Note
Now for the fine printEverything described here is lawful, and nobody named has been accused of any wrongdoing. Details of the King James Funding borrowing - the approximate $300 million principal, the 4.8 per cent coupon, the late-2049 maturity, the further $60 million of 34-year bonds at 5.75 per cent in August 2022, the roughly $245 million outstanding at the end of 2025, the identity of the two Sammons-owned insurers and the security over future off-court income including the Nike relationship - are as reported by Bloomberg in August 2026 rather than from any document reviewed by this publication. A spokesperson for LeBron James has described the arrangement as a securitisation of his personal, non-basketball earnings and a common tool among high-net-worth individuals, has said that both transactions carried independent third-party credit ratings and that the 2022 transaction was fully approved by the NBA, and has stated that he holds no ownership stake in Guggenheim Partners, Sammons Financial Group or either insurer. The Bloomberg reporting is by Weihua Li, Sridhar Natarajan and Alexandre Rajbhandari and is based on insurance industry records; Bloomberg notes that terms are otherwise scant in those records. The tax description in this article is general. That loan proceeds are not gross income is settled and uncontroversial; how any particular structure is treated depends on facts that are private here, including what the borrowed funds were used for, which governs whether interest is deductible and to what extent. Nothing has been published about the ultimate use of the proceeds, and this article does not assert any. The Bowie comparison is offered as a structural precedent, not an equivalence: those bonds were secured on existing recorded works with an established royalty history, while endorsement income is contractual and forward-looking. Figures for the historic Bowie issue are as widely reported at the time. Nothing here is tax, legal or investment advice, and anyone contemplating anything similar should take professional guidance.
One Last Word
What makes this worth understanding is not that a wealthy man found a way to pay less tax, because on any honest reading he has not. The endorsement income remains taxable, every dollar of it, as it arrives. What he did was decouple when he gets the money from when the money is earned - taking three decades of future shoe revenue and standing it up as cash in 2018, at a fixed price of 4.8 per cent, without triggering a single taxable event on the way. That is not a loophole. It is the oldest idea in finance, applied to an asset nobody could previously pledge: a person's continuing fame. Bowie proved it could be done with songs. The interesting question is what else it will be done with, and to whom, now that everybody has seen the certificate.
The hard numbers, for the road: in March 2018 an entity called King James Funding issued approximately $300 million of asset-backed bonds at a 4.8 per cent coupon maturing in late 2049, while LeBron James was still under contract to the Cleveland Cavaliers and months before the free agency that took him to the Lakers on a $154 million deal. The security is future off-court income, including a lifetime Nike relationship, and expressly not his playing contract. The buyers were North American Company for Life and Health Insurance and Midland National Life Insurance Co., both owned by Sammons Financial Group, whose portfolios were advised at the time by an arm of Guggenheim Partners. In August 2022 the same insurers bought a further $60 million of 34-year bonds at 5.75 per cent, and about $245 million remained outstanding at the end of 2025. Loan proceeds are not taxable income because they carry an obligation to repay, so none of the cash was taxed on receipt, while the endorsement revenue securing it remains taxable as received and services the debt. Selling the income stream instead would have been a realisation event taxable in the year of sale. The template is David Bowie's 1997 issue of $55 million of ten-year bonds at 7.9 per cent, bought in full by Prudential, secured on 25 albums and 287 songs, and redeemed without default in 2007.
