Gray and James

*Sports reporter Jim Gray, who says it was his idea to make LeBron James’ announcement an hour-long ESPN special, was not paid by the network for his hosting duties Thursday night.

Rather, the paycheck came straight from LeBron’s camp, which calls into question the integrity of ESPN’s entire sports journalism operation.

CNBC’s Darren Rovell reports:

Gray took the idea to James’ marketing agent Maverick Carter of LRMR, who then worked with William Morris Endeavor to put the package together in front of ESPN executives.

ESPN didn’t play down one part of the business arrangement of the deal — that Gray, the former ESPN and NBC reporter who is now working on a freelance basis, was James’ preferred interviewer. But the network didn’t say, and now says they didn’t know, that Gray’s travel and payment for “The Decision” show was being paid by the entity set up by Team LeBron and not by ESPN, as CNBC has learned.

“We aren’t privy to Gray’s arrangement,” said ESPN spokesman Mike Soltys. “He came as part of the package. We accepted Jim knowing that we would have extensive time for our people to interview LeBron, which was the bulk of the show.”

Gray’s agent Sandy Montag of IMG declined comment. Attempts to reach Maverick Carter, through James’ publicist Keith Estabrook, were unsuccessful.

But late Friday, ESPN spokesman Mike Soltys says that ESPN did in fact pay Gray’s travel and Keith Estabrook, LeBron’s publicist, said that LRMR, James’ marketing agency did not directly pay Gray. CNBC stands by its story that Gray was paid by the entity that was set up for the production.

Meanwhile, Gray’s interview was panned by TV critics. Richard Sandomir of the New York Times criticized the order and the timing of Gray’s questioning, saying that it took six minutes and 18 questions before asking on what team James would next play. USA Today’s Mike McCarthy called the six-minute lead up before LeBron’s actual announcement “excruciating happy talk.”

As part of the partnership, ESPN turned over some of the advertising inventory in the show to James’ team to sell commercials to the likes of the University of Phoenix, Bing and Vitaminwater. James’ team said it would donate $2.5 million from the proceeds of the ads to the Boys & Girls Clubs of America.

The eight brands featured within the show garnered $2.9 million in equivalent advertising time, according to Joyce Julius & Associates, a sponsorship evaluation firm. The exclusive broadcast received a 7.3 overnight rating, which is huge. The final rating will be out later today.