LeBron James is becoming a free agent for the 3rd year in a row, and his long gamble is close to paying off

According to Broussard, it’s unclear if James will again sign a short-term contract, but it behooves him to do it one more time.

If James signs another one-year deal then opts out again in 2017, the Cavaliers will then own his full Bird Rights, allowing them to sign him to a longer, more lucrative deal.

In 2017, James could sign a five-year deal with the Cavs (the longest he can sign for now is four) for 35% of the salary cap, with 7.5% raises each season.

With the NBA’s salary cap exploding over the next two years, expected to hit $108 million, James could sign a five-year, $204 million deal in 2017, with a starting salary of $35.5 million. (Note: The formula for finding true maximum contracts is more complex than simply 35% of a $96 million salary cap, as the max is tied to basketball-related income, or BRI. Read Larry Coon’s CBA FAQ for more.)

That could be a record-breaking contract and a huge payday, even over the considerable contract he could earn this summer. If James were to grow tired of his short contracts and sign long-term this July, he could land a four-year deal, with 7.5% raises each season, under the anticipated $96 million salary cap. That would be good for a four-year, $140 million deal, with a Year 1 salary of $31.6 million.

Not bad!

This is why James is opting out this summer, too, as opposed to opting in for his second year, then becoming a free agent in 2017. The salary-cap spike this year gives James incentive to get a nice one-year raise, going from about $24 million to $31 million.

And while James perhaps may not enjoy the lack of long-term security that comes with short deals, if James can forgo long-term security just one more year, the payoff for this gamble will be enormous.