In fairness to Kobe, I’m not sure what the NBA rules are on renegotiating an existing contract. It may be forbidden by the collective bargaining agreement. On the other hand, he already had that $45 million shoe contract when he signed his current contract with the Lakers.
I don’t know whether endorsements are ensurable. I’d assume at least the player would be guaranteed their pay for however many years remain on the endorsement deal – unless the contract has some sort of clause that invalidates it if they’re charged with a felony or whatever.
People always say this as if it makes them less deserving of the money they earn. Professional athletes have the rare ability to compete in a specific thing at the highest level possible. Most occupations, without outside salary limitations, financially reward this kind of excellence. Not to mention the fact that most people couldn’t keep their bodies in the shape athletes do, or endure the stress they are under, even if they were being paid large amounts of money. These athletes don’t just wake up one day and cash a check. They train for decades, through adolescence and adulthood, with little or no pay, to hone their skills. Most people will never work that hard for anything, let alone the “chance” to make a few million dollars and mortgage your future health for a few years in the sunshine. Most athletes deserve every penny they earn because they do something others cannot and will not do.
Three championships is exceptional, but yes, titles helped Anthony (NCAA) and Wade. LeBron’s shoe deal came before he’d played a game, and that’s probably more endorsement money than anyone on the Spurs will ever get. You’re talking about stars, and by the time a player is a star, I don’t think a championship will do much.
It can help a player become known, but once the player’s name and face are out there, I think a star is a star, and as such it isn’t worth his trouble to take a pay and hope a championship will lead to more endorsements.
I hope the players want to win also, but like I said, you’re talking about passing up a lot of money when they only have a limited time to make it.
No, sorry. No one in the real world takes a voluntary salary cut for a current job for a hypothetical, maybe-in-a-few-years financial advantage. As Marx once said, “I’ll take that proposal to my lawyer and if he likes it, I’ll get a new lawyer.”
If you took that cut and the team then didn’t bother to recruit anyone with the savings, you’d feel pretty foolish, wouldn’t you? Or what if they spent the money on players who turned out to be not worth the money?
Also consider that an athlete’s earning years are limited. For the NBA, you have maybe 10 years – maybe 15 if you’re lucky. You need to pay for the rest of your life after that.
Now, athletes may choose to restructure contracts – usually getting more money overall, but less to be counted against any cap. That’s a separate issue. But to voluntarily give up money you’re owed in hopes that it may turn your team into a championship one makes no financial sense unless you can guarantee the championship – and that you’re the one who benefits by the endorsement, and not the guy your money went to buy.
I could probably be making at least two-and-a-half times my current salary working as a computer programmer somewhere. (I base this in part on the fact that my twin brother is doing exactly that.) Instead I’m working on a Ph.D. in hopes that it will lead to a job I’d like more when I’m done. (No, I’m not doing it for future “financial advantage” but rather for future job satisfaction – but that’s the same as my example of an NBA player taking a pay cut for a chance to play on a winning team.)
Furthermore, I’d say that virtually everyone in grad school is making less money than they’d make if they took their college degree and went out and got a job in the real world. (At least, everyone who majored in a fairly marketable field, and is willing and able to move to an area with good job prospects.) Not to mention all the other people who choose a lower paying job over a higher paying one, because they feel the lower paid job had better prospects for advancement.
This sort of thing not only happens, but in my experience it’s fairly common place.
So you sign a two year contract for the minimum, and if they don’t make significant strides in that time you bolt at the end of those two years and go sign a max deal with someone else. If Lebron James offered to sign a two-year deal for the league minimum, I guarantee every team in the league would be happy to take him up on it.
Keep in mind, I’m thinking of the guys with the biggest endorsement deals. Unless you spend your money like a complete idiot (which, admitedly, a lot of people do), $30 million is more than enough to last a lifetime. Even if you don’t invest a cent, that’s $600,000 a year for the next 50 years.
I’m talking about signing for less than you could demand, not giving back the money in your current contract. And again, I’m not saying “this is the way to maximize your profit”, I’m saying, “You could still be ridiculously wealthy and actually play for a winner.” My comment about making more from endorsements just meant “You may not be giving up as much as you think.”
I could be wrong, but I bet Charles Barkley or Karl Malone would jump at the chance to go back in time and trade a couple seasons salary for a championship.
Here’s a relevant link from SI that lists the top paid athletes in 2007 and it breaks the proportions down between endorsements and salary.
Fact is, when you eliminate the individual sport athletes like racing and golf, where a uniform policy doesn’t prohibit overt on-field endorsement, you see that it’s a pretty short list of players who actually make a majority of their money from endorsements. I think it’s true that you are grossly overestimating the amount of advertsing money that is to be made out there.
A-Rod is the best baseball player in the world, playing in the biggest market in the country and his endorsement money only accounts for about 20% of his earnings. Ditto Jeter, who has all those championships you mentioned.
Kobe and Shaq are two of the best paid players in the NBA, both salary and endorsements, yet their ad money is still less than 50% of their earnings.
Couple of points that are important to understand. First, ad money is a lot less reliable than team salaries. To place the lions share of your earning potential into the hands of advertisers would be really risky. The media is fickle and there’s a real possibility that a PR disaster or long term injury could ruin your marketability. You could lose your livelihood overnight. Even in the NFL you have somewhat more security than you do from an ad deal. Secondly, your argument would require the team’s management to hold up their end of the bargain. These teams are in the business of making money and there’s no guarantee that a given owner would indeed spend that money the player left on the table on talent to surround him. Some of these guys are greedy little shits. Suppose the owner did spend it’s extra money on supporting players but those guys turned out to not be that good (see LeBron re: Larry Hughes), you’d have given up a big chunk of money for little added marketability. Even if those supporting players were good, if you or them got injured and missed that string of championships they’d be expected to win your market value would be less.
In short, the OPs scenario essentially creates a huge amount of risk for essentially no reward. At best the player would make the same amount of money if the extra endorsements offset the pay-cut but he’s not got infinitely more pressure on him to stay clean and to win, which isn’t exactly a attractive option.
I know personally, I’d damn well rather make $20-30 million dollars and largely be out of the media spotlight like Tim Duncan and Kevin Garnett than make $30-35 million like Kobe and Shaq and be followed by paparazzi everywhere and have my vices be displayed everywhere on the tabloid news. Team salary comes with a lot fewer strings attached than endorsement money does.
What’s in it for Lebron? He gets to make the same amount of money he makes with a Max deal but loses all the security of his guaranteed contract. Sure, he might raise his chances of winning a ring for those 2 years, but he also raises his chances of having a catastrophic injury (see Shaun Livingston/Grant Hill/Penny Hardaway) that could cost him hundreds of millions in the long run. Given the fact that most superstars managed to win titles without taking a paycut, I think I’d take that gamble instead.
Sure, Kevin Garnett probably could have been better served by taking $70 million instead of $100m when he signed his extension 4 years ago. That loss of $6 per year would have put him in line with Kobe’s salary and he might have had a extra player that could have created some playoff success. But being that he’s in Minnesota instead of LA, I’m not sure he’d have recovered that in ad money. He’d realistically have just been taking less money in order to win. The endorsements only really equate to “how much less” not “more in the long term”.
Would some players reach a point in their careers that they say “I have enough money” and choose to play on the cheap for a ring and the adulation that brings, sure. It would be monumentally stupid for a young guy to do that however. He’s got to protect himself.
If there was a realistic chance that Kobe could make an extra $200 million by winning a few more rings via advertising, then sure, maybe he’d take the cheap deal. But in actuality he’d only get a bump of maybe $50 million which isn’t that much compared to the salary he’d be abandoning.
You seem to think that the Michael Jordan’s and Tiger Woods’ of the world come easily. It is about so much more than winning. Some of the biggest endorsers on that list, like Mickelson, Peyton Manning, A-Rod and Dale Earnhardt Jr. are as famous for their inability to win as anything. Remember, when those numbers were established Peyton hadn’t yet won a Super Bowl and Mickelson was coming off his implosion at Winged Foot. Dale Jr. has never won a Nextel Cup and has underachieved for the last couple years yet he remains the most popular and marketable driver. Even the huge money that LeBron is getting from endorsers is more about speculation than actual capitalization.
The winningest NBA player of this decade is easily Tim Duncan and he makes a lowly $3.5 million in ads. This seems to go a long ways to destroying your premise that taking a pay cut in order to win equates to huge endorsement deals.
If Lebron James offered to sign a max deal, I guarantee that every team in the league would be happy to take him up on it. Why should a player act against his own self interest? Do you think no superstar’s ever had a career end quickly & unexpectedly?
First of all, thanks for the great link. I don’t really think I’m overestimating the money – I was really only thinking of guys who already have massive endorsement deals when I made the suggestion. Perhaps my choice of thread title was misleading – pretend it said “Basketball players with massive endorsement contracts should choose to play for cheap.” I freely acknowledge that giving up your salary in the hope of landing a major shoe contract is a stupid idea.
Have most superstars managed to win titles anyway? Maybe, but greatness is still no guarantee of a ring. Some of the greatest power forwards in history (Charles Barkley, Karl Malone) never did, one of the greatest point guards (John Stockton) never did . . . maybe those guys are the exception, but a lot of other top 50 players only won a single championship and spent a lot of time out of contention. But with one more top star, maybe they could have been in the finals every other year. (In fact, it was the acquisition of a second superstar that finally put a lot of those guys over the top. Julius Irving and Moses Malone needed each other, Oscar Robertson needed Kareem Abdul-Jabbar, etc.)
With regard to “what if he gets hurt”, I’m pretty sure (and please correct me if I’m wrong) that Lebron’s $90 million Nike contract is guaranteed money, even if he has a career ending injury in the first game of next season. Isn’t that a big part of why athletes sign multi-year endorsement deals in the first place?
I’m not saying they should act against “their own self-interest”, I’m saying why can’t that self-interest extend beyond making as many millions as possible? If they’re serious about wanting to win, and they know they get to be a millionaire either way, why not focus less on the money and more on winning?
Maybe I have a skewed perspective because I honestly believe I could have as luxurious a life as I could ever want living on far less than a million bucks a year. Maybe for someone who thinks that owning a yacht or a private jet (or whatever these guys spend their money on) is important to their happiness, there’s a meaningful difference between making $33 million a year vs. $16 million a year. It’s hard for me to wrap my head around that sort of mindset. To me, once you have enough to buy everything you want, the rest is basically just taking up space.
I’m not incredibly surprised that this idea isn’t getting tons of support. But still, let me ask you (those who disagree with me):
Say you’re Lebron James, a guy who had a $90 million shoe contract before he played his first NBA game. Would you care more about making an extra $20 million a year on top of that (or whatever he can sign for when he’s a free agent), or would you care more about getting a chance to play with another premier superstar (whom your team couldn’t otherwise afford) and having a realistic shot to win the championship. (I know they went to the finals this year, but if you saw it, they really didn’t have a realistic shot to win.) Keep in mind, Nike et al. have to pay you until the endorsement contract runs out, even if you get hurt. (Someone please correct me if I’m wrong about this.) But your chances to win the championship end if you have a career ending injury.
If the extra $20 million a year matters more, I’d like to know what you’d buy for it that you couldn’t otherwise afford, that would bring you (a professional basketball player) more joy than playing on a really great basketball team.
And yeah, I know Lebron is an extreme example in terms of his endorsements, but I have him in mind more than anyone when I’m making the suggestion.
You also shouldn’t forget the fact that the Player’s Association is looking for these superstars to sign contracts as large as possible so that the “benchmarks” for future player pay will be continuously higher and higher.
It makes it a little harder to ask for X amount of money when Kobe or Lebron is only making Y (“what did you do better than those guys, anyway?”) so the PA is annoyed when players sign below market value as it cuts back on the paydays of a lot of other players too.
Yeah, but why should it be Lebron who’s giving up all of the salary? Why can’t the superstar they’re going to bring in to play with him take a pay cut, too?
Here’s the problem with your logic. The Cavs can afford a second banana to put them over the top. The Bulls paid Jordan $28 million in a couple seasons and were able to afford Pippen and Rodman. The Lakers were paying Shaq $27.7 million and still could afford Kobe. The Mavs are paying Nowitzki about $20 million and have 3 other other guys on the team making $10 million. The cap is $54 million or so, plus up to an additional $10 or so in exceptions. The Knicks are paying $124 million in salaries, though they pay a luxury tax penalty. Fact is, the NBA’s soft cap is pretty loose. The logic that a team isn’t able to afford to put talent around a superstar is bogus. Essentially it’s a way for owners to protect oversized revenue margins. Cleveland is paying Larry Hughes $15 million and Ilgauskas $10 million, LeBron isn’t playing on a one-man team because his salary is too high, he’s playing on a team like that because his GM is a fucking idiot.
If LeBron takes a modest $5 million dollar salary instead of the $25 he’ll probably get down the road, all it means is that the Cavs have an extra $20m to piss away on overrated players. Perhaps a gimpy and old Ben Wallace at $14m. After next season guys like Elton Brand and Shawn Marion will be available and the Cavs will have plenty of money to pay them if they are smart.
Teams do have much more leverage over players in football, but I’m talking about authentic superstars.
Tom Brady, for instance, restrucuted his contract so the Patriots could sign more players to help him out. Brady is the one player the Patriots wouldn’t dare cut or threaten to cut.
I’m wouldn’t bet on this. I remember how Kobe lost plenty of endorsement deals when the whole rape thing went down. I doubt anyone knows for sure what LeBron’s contract says, but I doubt many of those endorsement deals are as ironclad as their player salaries are. I’m sure the players have to live up to certain standards and perform certain duties to get those checks (including playing at a certain level, and not raping people).
Tom Brady isn’t a saint. Because of the convoluted NFL salary cap system, NFL contract restructuring usually ends up benefiting the player because they salary is converted to a signing bonus. This means that they are guaranteed money they otherwise would not be. The benefit to the team is that this money, which has already been paid, can be prorated over the course of the contract., lowering the salary cap burden (which inevitably rises every season). Football players aren’t any more selfless than any other athletes.
Not really. People always forget the famous people have much higher overhead, and pay far more taxes than normal people. LeBron has to pay his agent 10%, the gov’t around 40%, and pay for lawyers, managers, accountants, handlers, bodyguards, etc. Thirty million quickly becomes 12 million before you pay all the rest of your “people”. Still not bad, but not as good as it sounds.
The easiest way for a superstar to get that coveted ring is not to take a pay cut and stay with his present team. The Caves, Nuggets, Wolves etc. all need too much personnel work for LeBron, 'Mello and KG to get the ring anytime soon. And, has been pointed out, these teams have not shown great acumen for evaluating or signing the right talent.
I maintain that the best way for the long eluded ring is for the player to move himslef to the right situation. This allows a player to pick his teammates, coach and city situation himself. Of course, the stars have to align: [ul]He has to be in free agency (both so the salry cap work out and he doesn’t have to rely on a trade to dilute tallent from the team he is headed to).
He has to be wanted on the team (would the Spurs take LeBron knowing that they might mess up what is very good chemistry?).
Similarly, he has to be able to fit in. Again if LeBron went to the Spurs would he want/expect alpha dog status?
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The best example of this lately shows how well this might work-even though it didn’t. Karl Malone and Gary Paton signing with the Lakers had nearly everyone handing them the title. They came in with the right attitudes had the right skils and nearly pulled off a title but injuries and the escalating Kobe-Shaq fued derailed their run against Detroit. I really think this could work again given the right circumstances and a reasonable amount of luck (which is required in any case).