I had a conversation recently with a family member about the rising salaries in the NBA. He believes that players in the league are being overpaid “just to play a game.” I, on the other hand, firmly believe that NBA players are not paid enough based on the revenue that the players generate for their respective franchises on a game-to-game and season-to-season basis.
First, let me dive into the expected salary cap for the 2017-18 NBA season which, according to NBA.com, was set at $99.093 million dollars with a minimum team salary set at 90 percent of the salary cap or $89.184 million.
Less than two years ago the salary cap for NBA teams was $70 million dollars with a minimum team salary of $63 million. The noticeable increase in the salary cap over the last two seasons is the result of increases in basketball related income (BRI) due to an influx of team and league revenue from a $24 billion dollar television rights deal that the league agreed to with ESPN and Turner Sports and which took effect at the start of last season’s free agency period on July 1, 2016.
Based on the numbers I have presented above it is easy to estimate the BRI for the 2015-16 season. The players negotiated a collective bargaining agreement (CBA) in 2011 that guaranteed them about 50 percent of the BRI. This split in BRI between the players and the owners is how the annual NBA salary cap is determined. Knowing that there are 30 teams currently in the NBA and that the salary cap for the 2015-16 NBA season was $70 million we can determine that the player’s share of the BRI for the 2015-16 season was $2.1 billion and the owners share of the BRI for that same season was $2.1 billion.
Using the same formula we are able to determine the BRI for the league in the upcoming 2017-18 season will be roughly $5.94 billion. That is a staggering amount of money that is generated on a yearly basis mostly from the sale of tickets, souvenirs, and endorsements. The newly negotiated CBA that took effect this summer provides the players with a similar split in BRI to the previous one meaning that in the 2017-18 season the players are entitled to, roughly, $2.96 billion, spread out over the league’s 30 teams resulting in the current salary cap number of $99 million.
The new CBA allows a player with 10 years of experience to sign a contract worth up to 35 percent of the salary cap, $34.65 million for the 2017-18 season.
Now consider that a player like the Cleveland Cavaliers’ Lebron James, $30.96 million salary for the upcoming season, and the value that he has brought to the franchise. The valuation of the team doubled from $515 million before he returned to the team in 2014 to $1.2 billion in 2017. James is also a major reason that the Cavaliers won an NBA Championship in 2016.
In the 2013-14 season, the season before James returned, the Cavaliers brought in $145 million in revenue for the entire season; that number rose to $233 million for the 2016-17 season, an increase of $88 million. This is not to say that James is solely responsible for this increase, but let’s be honest without him Cleveland is still drowning away in the bottom of the league collecting lottery picks and stinking it up.
On average in the 2016-17 season the Cleveland Cavaliers brought in an average of $2.8 million per game over the course of the 82 game regular season. On the other side of things James made an average of $378,000 per game over the course of the 82 game regular season, or roughly 13.5 percent of the teams revenue per game. James was also number two in jersey sales in the 2016-17 season bringing in extra revenue to the team through the sales of his jersey. Combine all of this with the fact that he led the team in scoring and assists, and finished third in rebounds and it is undeniable the value James brings to the team both on the court and in the bank account.
Many of you will say, “He is only one player, what about the rest of the league?” James is far from the only player in the league that generates revenue for their respective teams, he is also not the highest paid player in the league despite his obvious effect on the win-loss record of his club and the overall bottom line of the Cavaliers and the NBA.
The simple answer to this, for the people who believe they are overpaid, is to stop watching the games on television, stop purchasing NBA merchandise of any kind, and certainly do not go to a live game. You want to stop these players from earning the living that they deserve then you have to sacrifice the game you love, that’s the only way to change it, demonstrate to the NBA that you think these players are paid too much.
As for me I will continue to watch the games, buy the merchandise, and if presented with the opportunity go to live games. Because basketball is a beautiful game and the NBA provides an abundance of it played at a high level by highly-skilled and entertaining players who have worked their entire lives to earn their keep.
Simply put, if you have a problem with NBA salaries, don’t watch the NBA. That is the only way anything is going to change.
Reach Ryan Applegate at 937-402-2572, or on Twitter @RCApplegate89.