Star basketball players should choose to play for cheap

Cafe Society
1

This is something I’ve been thinking about lately. Say you’re a superstar basketball player. Someone like Kobe Bryant, Lebron James, Dwayne Wade, etc. You can easily demand a max contract from your team. But knowing that it generally takes at least two stars and a decent cast of role players in order to win a championship (and that league rules discourage teams from spending too much) wouldn’t it make more sense to sign for the minimum, and leave your team with enough money to sign a second top-tier star? I mean, you’ll easily make millions anyway from your endorsement deals, especially when your team’s playoff success raises your already high profile even further. In fact, if you had this plan from the start, you could probably negotiate your endorsement deals to pay you bonuses for things like making the playoffs, making the finals, or winning the championship, and make back a lot of the money you gave up.

So how come no one ever does this?

2

Would you take a lesser salary than what you have now for your job?

3

Well, in the NBA, it almost never happens. In the NFL, however, you OFTEN hear of superstars restructuring their contracts to allow their teams more slary cap space to sign more supporting players.

4

If I was making millions anyway, then maybe so.

I’m a grad student. I get paid decent money for a grad student, but obviously I won’t be buying a mansion any time soon. So taking a salary cut wouldn’t be a great financial decision for me. But if someone was paying me a million bucks to appear on a cereal box, and if taking a cut to my salary would significantly increase my odds of, say, eventually landing a tenured faculty position (or however you define success in my field), then I don’t think I’d even hesitate.

5

I recall Michael Jordan making what would be considered below market after his 1st return from ritirement. I don’t think the Bulls would have been able to add his salary at the time without trading players away. Of course, the cap rules are a bit different now.

Didn’t the NBA penalize a team for working out a secret contract with Joe Smith in which he would take less than he was worth, but they promised to re-do his deal the next year?

Man…this post sucks. I should have some cites or something. Or at least something to add. Oh…how about…

Players take pride in their contracts…to the point where they are looked down upon by other players if they aren’t getting a huge paycheck. You can see this with coaches who don’t make much. It’s much harder for them to get their players to respond to them unless they have a respectable contract, with both money & years.

6

That’s a little surprising to me. I focused on the NBA in part because that seems like the league where it’d be easiest for a team to boost themselves into championship contention by adding one more superstar (given that there’s only five guys on the court at a time). Whereas in football it takes a good quaterback and wide receivers for your passing game, a good running back and blockers for your running game, good defenders at the various positions, etc. Baseball likewise has a ton of positions that need to be filled – and even the best hitter in the game only comes up to bat one out of nine times.

7

I remember the case you’re talking about but not all the specifics. However, I’m virtually sure the problem there was the fact that they had a secret agreement. I’m talking about a player openly choosing to take less money, without asking for any special favors from his team in return (other than that they try to build a contender.) There’s no rule I know of that says you have to pay a player what they’re worth – otherwise, teams would get penalized because a player just had a crummy agent. (Although it more often seems to go the other way, where teams end up overpaying for guys who turn out to not be that great.)

Perhaps that’s true with coaches, but my impression has always been that players earn respect from each other much more on the basis of how skilled they are, and how many championships they’ve won. Did the Cavaliers (and everyone who played against them) have to look at Lebron James’ contract to know that he was carrying the team this year? Did the fact that Shaq was paid more than Dwayne Wade stop anyone from realizing that Wade was the number one guy for the Heat last year? (Clearly it didn’t stop the finals MVP voters.)

In fact, even with coaches I think championship success is the biggest way to get respect. I remember a story about when Phil Jackson first came to L.A., and one of the first things he did was invite Shaq out to his house and show him the six championship trophies he won with the Bulls. (Which didn’t make much sense to me; I didn’t think coaches got to keep the trophies. Maybe he had them on loan from the team or something.)

8

In the late 80s, Magic Johnson openly took a pay cut so that the Lakers could afford to sign Sam Perkins. I’m searching for a cite, but I remember it well because I remember thinking how freaking cool that was.

9

NFL teams can simply cut players in the middle of their contracts, so have far more leverage to ask for this sort of thing: “Well, Joe, if you don’t restructure your deal we’ll have to rebuild, and I guess that means you should move on.”

10

I think you may be overestimating the size of endorsements. I don’t know dollar figures, but I think only the hugest stars (the ones you mentioned and a couple of others) get really big endorsement deals.

Basketball players have very short careers, they’re basically all finished by the age of 40. It’s very unlikely that they will be able to match their basketball earnings in any other field once they retire, so basically you have to make your money while you can. They only get to be free agents a couple of times, and an injury can end their careers or cut their value any time.

From a more practical angle, after a player gets a big contract he spends big money. If you’re making $15 million a year and then sign a contract for $1 million a year, you might have trouble paying for your cars and houses - and a guy might not want to change his lifestyle that way.

For my part, I’ve wondered why the star players took the maximum number of years on their contracts, only to complain that the team is not competitive a few years later. I thought it made more sense to sign for the max value over, say, four years instead of seven and then move on if the team isn’t going anywhere. Lo and behold, James and (I think) Carmelo Anthony took that approach last year.

11

Well, a couple of years ago the Lakers tried that, signing Karl Malone and Gary Payton for incredibly cheap, because Karl and Gary wanted to win a championship before they retired.
The Lakers did not end up with a title, which probably helped put current players off of the ‘supergroup’ concept. Kind of too bad, because if they had ended up with a championship, it would have made NBA off-seasons much more interesting, as superstars flew around the country trying to convince each other to switch teams in order to form supergroups.

12

I second that. I used to know a Nike rep and he told me that, while he wasn’t at liberty to discuss figures, endorsement deals were a lot less than most people believe, “Except for Michael Jordan. He gets even more than you think.” This was around 1988, by the way.

13

The problem there was that Malone and Payton were at the tail end of their careers, and a shadow of their former selves. But do you really think that if Malone and Payton had been willing to take the minimum to go play with Shaq in, say, 1996, they couldn’t have given Jordan a serious run for his money? (They were probably not free agents in '96, so it could never have happened, but I’m speaking hypothetically.)

To be clear, I’m really only thinking about the players who combine superstar talent and tremendous marketing potential, guys like Lebron James. But even for a somewhat less high profile but still marketable star like Kevin Garnett – if he leaves the Timberwolves when he becomes a free agent in a couple years, and takes a pay cut if necessary to go play with Kobe Bryant in L.A. (assuming Kobe is still there), wouldn’t you think his endorsement value would skyrocket, just by virtue of the fact that he’d be (1) in a major media center (2) playing next to another high profile superstar, (3) almost guaranteed to at least make the playoffs every year? He might not make as much money as if he signs a max contract to keep on trying to carry a bunch of chumps, but he’d still be making more than 99% of Americans and probably enjoying his job a lot more too.

14

The Joe Smith debacle was Kevin McHale’s fuckup while running the Minnesota Timberwolves. Ironically, people are talking about Kevin Garnett and his max contract and about how hard it is to throw cash at the problem and sign big names; change has to come from trades for the 'Wolves, supposedly.

You’re also right about basketball’s appearance of a big star helping a team along. Of course the player has to fit well with the coaches, the locker room, and all that jazz, but I digress.

Now there’s a clause in Lebron’s contract that if he skips out next year and plays for a big market team, he makes extra wheelbarrows full of cash from Nike. This is an interesting subplot when you take Shaq into account. Shaq, supposedly, hasn’t spent a single dime of the money he’s made from his contracts. He spends his endorsement money. For a long time, he was second only to Michael Jordan as an endorsement figure, and he’s still way up there. If you’re an elite player and are already getting an absurd amount of money to sponsor some things, you’d think that your performance contract would mean a little less (and it’d be non-guaranteed if you’re a football player. Then again, I can see why football players want to make as much as they can as fast as they can, and it’s because they give their bodies up to that gruesome game).

Except you have matters of greed and ego kicking in. And agents, too. (If those first two weren’t enough!) Lebron makes that much cash because the “market” demands it, because he feels he’s worth it, because he wants it, because the cash is available, and because the agent is pushing to get his client as much cash as possible, and because the agent gets a percentage.

On the other hand, like it’s been mentioned already, some older players take pay cuts to win the title after it’s eluded them their entire careers. I’m of two minds about it, but it’s at least refreshing to see someone with money taken care of to finally put the priority of winning first. Of course, Karl Malone didn’t get his ring when he tried to do it with the Lakers (as did Gary Payton that year. He got his with the Heat a couple years later.) but that can be chalked up to waiting too long before switching priorities. Did Karl Malone already have all the money he’d ever need 10 years earlier? The year John Stockton retired, did he think he’d have a chance at a ring? Apparently, he felt the need for more money, and that motherfucker, ego, jumped in and said he could do it without one of the best point guards in NBA history.

15

But the fact remains that they’re getting paid a whole lot of money to play a sport…a game.

16

I don’t think reaching the playoffs would do anything for the endorsement potential of an established star - or that even if it did, it would offset the kind of pay cut we’re talking about.

17

Yeah, but Jordan’s success as an endorser changed the nature of the business for everyone else. If I remember right, Jordan’s first Nike contract was for something like half a million dollars. Nowadays multimillion dollar shoe contracts are – while limited to the elite few – definitely far from unheard of.

Here’s what I’ve been able to google on some of the highest paid endorsers in the NBA:

Lebron James came into the league with a $90 million contract with Nike.

In 2003 Kobe Bryant signed a four-year, $45 million dollar deal with Nike.

Carmelo Anthony came into the league with an $18 million Nike contract.

Keep in mind, this is just what they were making from one company. Yeah, those guys are the exception and not the rule, but it’s guys like that that I was thinking of in my original post.

18

Keep in mind that they don’t only get one endorsement deal. Many people get sponsored by various things, but I’d be willing to bet that their Nike deals, or their apparrel deals will be the biggest deal.

19

Because if you’re caught…I don’t know, say… raping a hotel worker in Colorado - your endorsements might dry up? Or if you wreck your motorcycle - you may not be endorseable? I know atheletes can get injury insurance for salary (or even potental salary like some big name NCAA players), but can they insure against future potential endorsements?

Or maybe because they talk like they want to win championships, but don’t really walk the walk? Given a choice between $15 mil/yr with low chance of a ring, or $5 mil/yr with high chance of a ring - they usually choose $15 mil/yr.

Kobe’s blasting the Lakers for not adding talent to get a ring. How much of his salary has he offered to give back/renogotiate to free up some cap room?

20

Maybe not, but winning a championship definitely does. Think that $45 million dollar shoe deal of Kobe’s I just mentioned has anything to do with the fact that the Lakers had just won their third straight championship?

I mentioned simply making the playoffs for two reasons. (1) A player could deliberately negotiate his contract to include a bonus in each season that he makes the playoffs, knowing that he has a better than average chance of that if he’s about to sign a low paying contract with his team and leave them with lots of money to sign a top free agent. And (2) I mentioned it in the case of Kevin Garnett, because I think that his lack of postseason success (and the fact that he’s playing in a small market) is one of the main things holding back his endorsement potential from being what it could be. (He may be making a lot anyway – I couldn’t find the figure.)

But regardless, I think it’s hard to deny that at least making the finals and winning championships improves a player’s marketability. But the bit about increased endorsements compensating for some of the lost revenue is really secondary to my main point anyway. I’m not trying to say “this is the strategy that will maximize your profit”, just “you could take this strategy and still make a ridiculous amount of money”, plus get to win a lot more, which (one hopes) is also something players care about.