Is the NBA overpaying its players?

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The National Basketball Association (NBA) is one of the most profitable sports in the entire world. Generating $8 billion dollars in revenue last year, the league holds the world’s third highest income across all sports. It has been America’s most heavily followed sport. Aside from its national popularity, the NBA yields roughly $500 million in international media agreements every year. The individual franchises themselves are valued at an average of $2.12 billion dollars, and that number continues to climb. So with the league having such a high income year in and year out, it makes sense that the average NBA player’s salary is $7.7 million dollars, right? This question is still unanswered and is debated every day by hoops junkies and experts alike.

To be able to properly address whether there is an issue with the league’s current average salary, we must first understand how salaries are determined. There are various levels to different salaries players can make. These include the rookie scale contracts, veteran-minimum contracts, and ‘SuperMax’ contracts.

3.3.19 UMD vs. UM33
Jalen Smith, MSJ Class of 2018. Photo Credit: MGoBlog / Flickr (https://flic.kr/p/2dVykFA)

For example, first-round draft pick out of the University of Maryland, and MSJ Class of 2018 graduate, Jalen Smith received a ‘Rookie Scale Contract’ after being drafted 10th overall by the Phoenix Suns. The ‘Rookie Scale Contract’ is the first contract negotiated by a team and their first round draft pick. This contract entails a minimum length of 2 years, with a 3rd and 4th year option. The salary of said contract is determined by the rookie salary scale and can vary depending on minutes played, injuries, suspensions, etc. In Jalen’s case, he inked a 4-year deal worth $19.3 million dollars, an average salary of $4.825 million. However, a contract is much different for that of an undrafted rookie. The least amount of money an undrafted rookie player can make in his first year with their team is $893,310 dollars. That number typically goes up when the player’s minutes increase, points per game (ppg) increase, rebounds per game (rpg) increase, etc. The rookie salary scale continues to grow as the “salary cap” grows and other various elements to a team’s spending budget increases. That being said, does the NBA have a serious problem on its hands, or is this just the nature of the beast?

If there is one thing that the NBA should be commended for, it’s the fact that they do not sell league veterans short on their ‘vet-minimum’ salary. The base ‘vet-minimum’ salary a player with 10 or more years of service in the league can receive is $2,564,743 million dollars annually. If the ‘vet-minimum’ deal said player was signed to is a multi-year deal, they will receive the above salary each year pending the contract’s terms and conditions designated by the franchise. For example, longtime NBA center Marc Gasol signed a 2-year, vet-minimum deal last offseason with the Los Angeles Lakers. The league encourages teams to sign veteran players to deals by lessening the amount of “real money” the veteran accounts for on the franchise’s payroll. The NBA will reimburse teams for signing veteran players by paying off a certain portion of the vet’s salary that is equivalent to a 2-3 year player’s minimum salary. Basically, a vet can sign a 1-year contract worth $2.8 million, but the team that signed him only has to pay $1.6 million of that deal. Alleviating a franchise of a portion of a veteran player’s salary helps the NBA continue to keep veterans on rosters and a part of the league’s community. 

Kevin Durant Dunk
Oklahoma City takes on the Golden State Warriors in NBA action. Photo Credit: Derrick Story / Flickr (https://flic.kr/p/9if3DY)

A gray area of the league that is arguably the most debated and talked about aspect of salaries is the ‘SuperMax’ extension that can be given to all players regardless of age/years played. The ‘SuperMax’ contract extension is the largest amount of money a team can offer a player, typically a superstar of the league. The terms of the contract vary depending on how long the player has been in the league. For example, a player that has been in the NBA between 7-9 years can earn an extension worth greater than 30% of the franchise’s overall salary space. This means that the ‘SuperMax’ itself has to be worth at least 30% of the entire team’s payroll. Another option the team has is to increase the player’s salary by 105% of what they earned the previous year. Aside from the numbers aspect of the ‘SuperMax’ deal, it can cause division in locker rooms and between teammates.

Players who make the league minimum or significantly less than that of a ‘SuperMax’ player can feel undervalued and unappreciated. Some can even be envious of their teammates. For example, former Houston Rocket shooting guard James Harden was traded to the Brooklyn Nets after having a fallout with the Rockets. Harden was adamant about not playing for Houston, turning down a 2-year deal worth $103 million dollars. As a player on the Rockets at that time, it would have been easy to feel discredited and overlooked by the coaches and management. Even though he was later released, former center for the Rockets DeMarcus Cousins voiced his displeasure with management and with James when it came to how the situation was handled. This is a prime example of how ‘SuperMax’ contracts can rip a franchise apart.

After analyzing and reviewing the NBA salary and how it works, do you feel that the players are overpaid, underpaid, or paid just right? Should franchises continue to dish out ‘SuperMax’ deals, or should the league regulate how many players can receive these contracts? With the NBA having a “soft” salary cap, meaning the cap number can be stretched and adjusted, should the league switch to a “hard” cap to limit super teams and “big threes”? All these questions I have presented all stem from one, single major debate…are NBA players overpaid?

Brayden Spurgeon is a member of Mr. Dan Peightel’s Honors Freshman English class.