How Basketball Players Get Paid | All You Need To Know
Professional basketball players are professional athletes who get paid to do what they love. The NBA is the top professional basketball league in the world. And many professional players earn millions of dollars every year. How does this happen? Well, it’s complicated.
We’ll break down how professional NBA players get paid so you can understand how these professional sports contracts work!
Pro Basketball Players Contracts
Firstly let’s explain professional basketball contracts. Although every professional contract is unique, they all function in a similar manner. First of all, each season, the general manager or owner of a team negotiates the wage of the professional basketball players.
These discussions can get very heated! For instance, let’s say an NBA player has had a good year overall. and desires to be compensated more for his performance. He’ll have to persuade the general manager of how important he is to the team’s ability to win games and generate more cash.
On average Basketball players get paid around 20% of total revenue gained by their franchise. So it makes sense that teams want players who create large amounts of profit. After these negotiations take place between both parties.
A decision regarding the type of contract that a professional athlete would prefer should be made (e.g. short term, long term, or even a “team option”). When a professional athlete signs a contract to play for a team, the team has the option to decide whether to keep the player through the current season. The agreement is, however, only voted upon at the conclusion of each season.
Similarly, professional basketball players can negotiate endorsements with companies (e.g Nike or Adidas). These contracts vary in size and length depending on how large of an athlete you are!
The average professional superstar player earns about $80-100 million per year. Crazy thing is they get more money from all their endorsement deals combined that their actual NBA Salary. It’s no wonder these young men go into sports after graduating college! So let’s break down what this looks like:
The Reality About Clauses
Before anything further can happen, professional players must fulfill the terms of their contract after joining the organization. This is due to the fact that many professional athletes’ contracts have stipulations preventing them from receiving outside compensation until the end of the current season (e.g. endorsements).
This means that professional basketball players will be prohibited from signing endorsement agreements with brands for the life of their contracts unless specifically permitted by the contract.
There are some exceptions, however – if an NBA player has won MVP once then he is allowed one offseason deal up till July 31st. But only your current NBA franchise may negotiate with you!
Contract Length & Obligations
Players sign professional NBA contracts with a team and each contract has a different length of time that it will last for. In the majority of cases, professional players are provided with at least one year guarantee on their professional basketball contract.
This means if they get cut from their professional sports team before the end of this professional agreement. Then they still have the option of looking for professional basketball contracts from other professional sports teams.
Professional athletes may have the chance to sign a new professional contract with the team after fulfilling all of their contractual requirements.
Professional athletes may now reopen the salary negotiation. Nonetheless, it’s crucial to understand that professional basketball players will find it simpler to get compensated if they perform effectively throughout the entire season.
If professional athletes don’t settle on renewing their current contracts during negotiations. Or even after negotiating. There are ways professional NBA Players can leave teams to join other ones. This process is called the free agency and usually happens in July when all 30 league rosters turn over.
When professional basketball players become free agents. They have the freedom of choosing which team they want to play for next season!
Endorsement Deals & Sponsorships
Professional NBA players also have endorsement deals. Which allow them to earn extra income on top of what they make from playing in games. These sponsorship deals usually come up when a professional athlete’s brand value starts growing (e.g Kobe Bryant, Lebron James, Stephen Curry).
Sometimes these endorsements may happen before or after a professional basketball player signs his first professional contract.
Professional basketball players sign endorsement deals as a way to make more money off the court. They get cash for starring in commercials and ads. These players sell everything from clothing and shoes to food and cars.
Fans love knowing that they can buy, wear, use and eat the same things that their favorite players do. Some of the top endorsement deals of all time helped players earn more money than for endorsing products than they did for playing.
The NBA is the major sport where this trend has gained the most traction. In addition to earning significantly more money from endorsements than athletes in any other sport, nearly every NBA player has some form of sponsorship, whether it be with an athletics firm like Nike or one that has nothing to do with sports, like McDonald’s.
LeBron James ($53 million for Sprite, Nike, and Beats), Stephen Curry ($42 million for Under Armour, Chase), and Chris Paul ($8 million for State Farm, Jordan) are some of the current well-known product endorsers.
How can players score endorsements?
- Become better basketball players – LeBron James, Stephen Curry, and Kevin Durant, among other elite NBA players, may earn even more money from endorsements and commercials than they do from their real NBA salaries. As a result, becoming a great player entails much more than just securing a larger NBA deal; it also opens the door to a wide range of lucrative endorsement opportunities, which may enable players secure financial fortunes well in excess of what they might earn only from their NBA contracts.
- Play in a bigger market – New York, Miami or Los Angeles. While players who do not play in these cities can still make significant sums in endorsement money, playing in bigger cities means brighter lights and much more exposure to fans, as the media capitals of the U.S. are in the bigger cities. When living in these bigger cities, players may also become more popular and can, therefore, capitalize on their fame with more endorsements.
- Build up their social media following – Top NBA players with millions of social media followers, like Kevin Durant, Stephen Curry, and Giannis Antetokounmpo, can bring in the $100,000s per post, while the league’s most recognizable star, LeBron James, may make as much as $1 million for a single post, as we have seen in recent years.
What about Bonuses?
Professional basketball players are paid more than just salary and endorsements. Can you guess what else they get? They also get bonuses! For instance, the NBA Finals MVP will receive about $150 thousand in bonus money from the league itself.
And the team is not taxed for this amount. The same goes for professional basketball players who make the All-Star team. They get a nice bonus of around $100 thousand to share between them, these are depeding on the clauses of the contract. Some players may get to upwards of a million in bonues if they make certain individual awards like All-NBA, All-Star, MVP, etc.
The NBA also has its own special rules and regulations when it comes to bonuses. While some teams may pay their professional athletes in cash, others will reward professional sportsmen with other incentives such as luxury cars or even homes!
However, these big payouts only come around every once in a while. So most professional athletes need to quickly save up before that happens or be smart with how they spend their money.
The Biggest NBA Contracts
NBA player contracts are usually multi-million dollar deals. The biggest of NBA player contracts are known to be worth $200 million-plus over seven years. This kind of professional contract is only earned by professional basketball players who are considered the best in their league.
The biggest professional sports team deals currently come from Lebron James and Stephen Curry! LeBron James has agreed to a two-year, $97.1 million contract extension through the 2024-25 season with the Los Angeles Lakers. That’s almost $50 million just for a year.
To put into perspective, Lebron earns about 135 thousand dollars per day, or 5,560 USD per hour! Klutch Sports CEO Rich Paul said the league-maximum deal makes James one of the highest-paid player in NBA history.
Steph Curry signed a 4-Year(s) $215.3 Million contract with the Golden State Warriors on 08/06/2021, with an annual average salary of $53.8 Million.
This post has been a deep dive into the contracts of pro basketball players and how they make money through other sources. What do you think? Do these contractual agreements seem fair or unfair to you? Let us know in the comments below! Read more about basketball here with us!
Here are Some of our Favourite Basketball Sneakers
Here we will be giving more of an opinion, rather than facts. Are the sneakers worth the price that they are being sold at? Should you upgrade from your current sneakers, depending on what boots you own? What features stand out on these sneakers? If any. Does it do the job? Speed, control, stability etc. Depending on your needs/preferences. We can also mention its durability, if we have collected enough data on the specific sneakers.
What did we expect vs. what we got. Is it maybe overrated/underrated?
Here’s our pick from the very best of the bunch.
On your way to the pro leagues? Here’s our pick.
Want something to start with? Have a look at our pick.