Im a massive LeBron fan and want the Cavs to win the title, but i wouldnt want the Cavs to cave to either Thompson or LeBron.
I think LeBron was serious when he said he wanted to come home and set up his family in Cleveland/Akron Ohio, given the Cavs are the only gig in town i doubt he leaves. If he comes with the direct threat i say play chicken and ignore it, as he is contracted this season anyway, and if he leaves, well the Cavs are in better shape going forward than last time he left with Irving and Love signed long term. In reality they already lost him and missed out on his prime, he is still awesome and one of the best in the league, but i think his prime is past him, so wouldnt be as big of a loss this time round anyway. So i say take the risk there, if you really think he is going to leave trade him for a SF who is signed for a few seasons ie Jimmy Butler and build around them with Irving and Love, that would still be a fantastic team.
With Thompson, the dude is a back up, even if they start really bad and Love gets hurt and misses heaps of games Thompson isnt going to be the difference between them greatly improving there record. Before you demand max money how bout becoming a consistant starter and averaging 15&10 on a winning team first, so there is no way id pay him over the $80 mil offer they previously made, infact id reduce it.
I beleive the Cavs have pulled the $80 mil offer, this is how id go from here.
Use the 10.5 mil exception sign the best pf/c out there, someone like Taj Gibson who is in a deep front court would be ideal,who is on 8.5 mil, so maybe even get them to throw in Bairstow too.
Lets face it with the injury history of guys like Varejao even with Thompson signed an extra big for that 10.5 mil exception would be a good thing.
Then id offer Thompson a 5 year $65 mil deal, take it or leave it. Basically reduced to cover the spending of the extra 10.5 mil and a bit more for screwing around.
Thompson is a restricted free agent, so its obvious no other team has offered anything above the $80 mil the Cavs had on the table, else they would have taken it and forced the Cavs to match, worse case scenario is someone offers say $85 mil over 5 years, slightly more than the first offer, if so just match it, if anyone is crazy enough to give Thompson the max, just let him walk.
With Love starting at PF and playing the bulk of the minutes and guys like LeBron, Jones, Jefferson all capable of playing back up mins at PF, they can afford to lose Thompson for nothing and be just fine imo.
Thompson is a handy player, id prefer to have him on the Cavs team, but not at any cost, he just isnt worth it.
If the worse happens and they have injurys to guys like Love and a really bad record, they have bigger issues than not having Thompson and Thompson isnt good enough to be the saviour to help them win the title in those circumstances anyway.
Thats my take and how id handle it.
Teams should never sell out to ANY player, including LEBron imo, as much of a LEBron fan as i am.