Performance-based salaries in the NBA?


What if the NBA owners paid players differently? (Photo credit to uiowa.edu)
What if the NBA owners paid players differently? (Photo credit to uiowa.edu)

Almost everything relating to pay is based on past performance and experience.

Great performance means a reward, whether it’s a bonus or a big bump in pay.

Experience usually means higher starting pay.

What if the NBA went about paying players like that? What would the contracts look like?

Everything has to have a system. I have created a “rough” system, in terms of performance-based pay.

I got this idea from FanDuel. It updates the prices of players every few days or every week and that’s how I developed this idea.

Anyway, here it is.

Players would get paid two separate checks. One check would be performance-based, and they would have the options to receive a check the day after every game, once a month or once every three months.

The second check would be called the “value” check. This check would be handed out after every season or once the team has added up its revenue from brand, market, stadium and sport.

First, my system:

$500 per point scored

$500 per rebound

$500 per point generated from assists. (example: LeBron James finished the season with 511 assists, but generated 1,228 points from assists. Take 1,228 and multiple it by 500)

$750 per block

$750 per steal

-$250 per turnover

However, I feel that tenure is important. The above system would be the base-salary a rookie would get. For every year of experience a player has, one percent is added to the dollar amount.

James just finished his 12th season, so 12 percent is added to every base-dollar amount. He is getting $560 for every point, rebound and points generated by assists, $840 for every steal and block, and getting $560 deducted for every turnover.

Since LeBron was in my example, let’s use him to see how much money he would make  based on his statistics.

$976,080 from points

$232,960 from rebounds

$687,680 from point generated by assists

$41,160 from blocks

$91,560 from steals

-$152,320 from turnovers

Total – $1,877,120

From there, incentives could be put into contracts. Shooting over 45 percent from the field, 35 percent from three and 75 percent from the line (all league averages) would be added bonuses of, let’s say $250,000 a piece. Being named to the All-Star team? Another $50,000. Making one of the All-NBA teams? How does $75,000 sound?

Playoff-based performances would double. So, $1,000 per point and so on.

Players hurt in the beginning of the year would receive a minimum of $100,000, if they were out for the season.

Here’s where it would get interesting, though.

What makes a franchise valuable? According to Forbes, teams make money from sport, market, brand and stadium revenues make up the entire value of a NBA franchise.

Every player would get a tiny percentage of each, let’s say .005 percent, if they are with the franchise for at least one year. After that, the percentage goes up annually at a rate of .0010 percent. In six years, a player would be earning 0.011 percent.

The Cleveland Cavaliers have a value of $915 million. James would receive $1.465 million from sport, $1.695 million from market, $915k from stadium revenues and 535k from brand.

Let’s say he is named to two All-NBA teams, that’s another $150k, plus $50k from being named an All-Star.

Adding that to his performance-based salary, James is now getting paid $2,077,120 million. Add that to his cut of value from the Cavaliers, it’s up to $6,687,120 million.

On to jersey sales now. Let’s say the average authentic NBA jersey sells for $90. James has 10 million of his jerseys sold. If James gets just two percent from all those sales, it adds another $18 million on to his salary. His salary is now $24,687,120.

I think it is a unique idea that can help a lot of people figure out who wants the money (i.e. staying with their franchise longer) or who wants to win (i.e. going to different teams every few seasons).

Note: Players would sign a contract for how many years they want to play for a team. Player and team options would still exist. Expiring contracts wouldn’t be valuable in trades anymore because money wouldn’t come off a team’s books in a trade.

This could actually get rid of the salary cap in basketball and force owners to put the money where their mouth is. Of course, it’ll be up to the players to make the owners do that. Players wouldn’t have to take pay cuts, though.

Again, I thought it was an interesting idea and I know there are several complications with this idea. I’m going to continue to smooth some of the rough edges and make it a little clearer down the road.

I plan to keep working on this.

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