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!
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Pro Basketball Players Contracts
Firstly let’s explain professional basketball contracts. All professional contracts are different, but they generally work in the same way. First of all, professional basketball players negotiate their salary with a team’s general manager or owner every season. These negotiations can be intense! For example, if an NBA player has been playing well throughout the year. And wants to get paid more money for his performance. He’ll have to convince the GM how valuable he is to winning games. Which will result in increased revenue for the team.
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. There should come out some sort of agreement on what kind of contract that professional player would like (e.g. short term, long term, or even a “team option”). A team option contract is when professional athletes are contracted to play for a team. But the contract is only decided upon at the end 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 player earns about $140 million per year from all their endorsement deals combined. 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
Once professional players are signed to the team they must finish out their contract before anything else can happen. The reason for this is that many professional athletes have clauses in their contract. Which prohibit them from earning outside income until after the end of the season (e.g. endorsements).
This means that professional basketball players will not be able to sign any endorsement deals with brands during the duration of their contracts. Because it’s illegal. 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.
After professional sportsmen fulfill all contractual obligations. There may come an opportunity for them to sign a new professional contract with the team. At this point, professional players may negotiate their salary once more. But it’s important to know that if they are playing well throughout the year. Then it will be easier for professional basketball players to get paid.
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). Sometimes these endorsements may happen before or after a professional basketball player signs his first professional contract. But generally speaking, these endorsement deals aren’t as glamorous as professional sports players may think. It’s rare to see professional NBA Players with their sneakers, for example – because it is illegal!
Endorsement deals are usually negotiated between the professional basketball player and his agent on one side of things. Meanwhile, endorsement money these athletes will be making per season typically comes out of their salary. The reason why professional NBA teams can’t regulate this type of income is that they aren’t able to pay professional sportsmen more than what they’re earning at that moment in time. For example if an NBA player has $20 million coming from endorsements. Then he cannot get paid over $20 million by his current team.
Sponsorship deals are separate from endorsement deals. But essentially both types help professional basketball players generate extra income. Sponsorships are usually negotiated between professional sports agents and the professional athlete’s team. In this case, it is very important to remember that professional NBA players aren’t allowed to use their social media accounts without prior permission from their professional basketball teams. Because these athletes represent a brand!
With Basketball being one of the most popular professional sports around the world. It generates billions through sponsorship deals alone every year and NBA players get paid out big time too. For example, LeBron James has one of the biggest shoe sponsorships ever! He gets paid $20 million a year by Nike to wear their shoes.
Another example is professional basketball player Stephen Curry, who has been with Under Armour for years now. And he continues earning money as part of his contract with them! He started by wearing sneakers designed by the company, before eventually creating signature shoes just like other famous endorsers such as Michael Jordan.
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.
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 made history when he was able to negotiate a four-year deal with his current team. The deal which was worth around 120 million dollars. While Steph Curry got another 80+ million dollars for five years. On top of what he already had coming in. Which makes him one of the highest-paid professionals ever!
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.