NBA Players Make Massive Amount of Money for Reasons
The majority of the wealth of the world is controlled by a tiny minority of people, and NBA players are some of these people. As being super popular, they are the group of people who are in the top class with highest salaries compared with other professions. The reasons contributing to their massive salaries bring the public interests, and many people start to ask why. As an example, there are many individuals who have possessed massive wealth such as Michael Jordan in the 20th century as well as LeBron James and Kobe Bryant in the 21st century. Meanwhile, since the global popularity of basketball grows fast, the number of audiences is increasing significantly, which results in bigger demands on televised games. The fact that the NBA players make the massive amount of money brings an interesting question on how and why they obtain the money. Hence, the NBA players have become the focus of researchers who try to find out why they become super-rich. Studies show that many reasons contribute to the massive wealth of NBA players such as talent, skills, and TV contract. Therefore, studies have shown that NBA players are earning a great amount of money is because NBA has many business partners, the players own outstanding talents and premium basketball skills, huge demands from fans, and other factors.
Before NBA became so popular today, NBA has a long history leading to its success nowadays. The National Basketball Association (NBA) was introduced based on the existence of National Basketball League (NBL) and Basketball Association of America (BAA) (“NBA is born”, 2009, p. 1). Afterward, it starts its own long-time success with making massive avenue. As a result, NBA Players always attract people’s attention not simply because themselves are very popular but also because of their massive amount salaries. In fact, NBA players are the highest paid athletes in the United States. Badenhausen (2016) reports the current average NBA salary is the highest in all sports which is around $6.2 million. In addition, the number of the NBA average salary is likely to achieve $10 million in 2020 because of the new deal of $24 billion TV agreement between NBA and ESPN & TNT. (p. 1) Back to the 2013-2014 season, Lyons Jr, Jackson Jr, Livingston (2015) claim around 10% NBA players make more than $10 million (p. 2). In comparison, Badenhausen (2016) lists the average salaries for the other biggest sports leagues such as MLB, NHL, NFL, and MLS are respectively $4.4 million, $2.9 million, $2.1 million, and $309,000 (p. 1). The numbers clearly prove that the NBA players are the highest paid athletes over the country. Furthermore, Ziller (2016) reports NBA players are making a lot more money than NFL superstars (p. 2). One outstanding fact for NBA average salary is that back to late 20th century, it shows an increasing tendency, and it keeps increasing nowadays and will be increasing more in the future. In table 1 provided by Staudohar (1998), the average NBA salary kept increasing from 1984 to 1998 with stable pace (p. 4). Lyons Jr et al. (2015) state there were only eleven players make more than one million dollars back to 1980s with the highest salary of $2.5 million. However, nowadays the number has increased significantly, and the highest salary becomes $30.4 million (p.2). Because the average salary has increased to $6.2 million for NBA players and it is likely to increase to $10 million as Badenhausen predicts. Therefore, people begin to wonder why they can earn so much money. In fact, there is a great number of factors and reasons are behind the just those numbers of the high salaries over the past thirty years.
The first reason for NBA players to make a massive amount of money is because NBA has many endorsements which bring a massive amount of money such as TV contract and sponsorship deals which provide billions of dollars that may increase NBA players’ salaries. Draper (2014) conducts a report to state that the NBA has made a nine-year with a total amount of $24 billion deal with ESPN and Turner Sports. The new deal brings the NBA around $2.6 billion annually (p. 1). However, it was $930 million annually before, and it increases significantly by the new deal to increase the amount of money to the whole NBA. By comparison, the previous annual $930 million deal was also significantly higher than its previous TV contracts (Draper, 2014, p. 2). The obvious result of the new huge TV contract is that it benefits the NBA players to earn more money. Lyons Jr et al. (2015) states NBA may increase its income three times more than before caused by the new TV deal (p. 3). There are benefits from more national televised games. For instance, many NBA players many obtain chances to make money such as doing advertisements or holding basketball camps by the exposure on television to increase their fame. In addition to massive TV contract, advising supports, jersey selling, and tickets selling compose the rest of massive money income contributing to NBA players’ high salaries. Ziller (2011) claims an existence of “Sea of Fans” who give money to NBA in forms of buying game tickets, watching TV advertisements, and purchasing jerseys (p. 2). “See of Fans” is actually a term to illustrate that a great number of fans is supporting the NBA players and expressing their loves to this game. Since the teams sell their jerseys quickly, many famous brand companies have begun to consider adding their sponsorships for their business. For example, Jarvis (2017) states General Electric has made a $7 million sponsorship’s deal with Boston Celtics and Goodyear has made a more than $10 million deal with Cleveland Cavaliers to show their logo on the players’ jerseys (p. 3). These expensive sponsorships will bring the teams more annual revenues which consequently brings the players more money. Therefore, all of the endorsements for the NBA or each team can lead to the massive salaries of NBA players.
Besides commercial sponsorships, one of the most crucial factor for NBA players to receive such high amount of money depends on their own performances to the basketball aspect. The performances in basketball performance can be separated into two sorts. One is their playing performance in the games, another is their efforts off the court. A common fact is that all NBA players are from the very small group of super talented people to play this sport in this league. Ziller (2011) states there are few high talented people to become NBA players, however, the demands are huge (p. 1). Even if NBA players are mostly high talented, there are still more determinants to decide how much money they should make. Lyons Jr et al. (2015) point that NBA team owners are willing to pay those players who can contribute to the teams’ success with wins. In addition, the players need to achieve the determinants including the most essential two factors, points per game and field goal percentage (p. 8). It is not complicated to understand players with higher points per game and field goal percentage are favorable because they play more effective games and contribute the most crucial factors for winning. Moreover, Lyons Jr et al. (2015) future claim factors such as rebounds, assists, and personal fouls are also important, however, fouls would bring negative effect for one player’s salary because it would hurt the team in games (p. 8). Therefore, although most NBA players are very talented and in high demands, some certain determinants are still applicable to decide whether a player should get paid more or not.
Comparing with players’ performance in the games, their dedications outside the games are also essential regarding why they deserve highly paid. Young (2015) states NBA players deserve their high salaries because they spend a great deal of time on practicing, they own extraordinary talents, and they may get serious injuries (p. 1). In order to become excellent basketball players, these millionaires start the training process when they were young. Young (2015) says basketball players dedicate their whole lives on playing basketball since junior school from Monday to Friday in order to get in the league one day to make the money. Even during the offseason, high paid players cannot get rest in order to become better and stay competitive (p. 1). Therefore, besides talent and good in game performances, NBA players have dedicated unbelievable long time on practicing in order to obtain the opportunity to play. This process even begins since they were as kids. Coon (2013) claims one interesting fact is that NBA players play especially hard and put a lots effort in their contract year which means they are in the last year of their current contracts, because they expect to obtain bigger and longer contract after the old contract (As cited in White II & Sheldon, 2013, p. 196). As a result, in order to strive for higher salaries, White II and Sheldon claim that NBA players are likely to dedicate more work on the court than usual to improve their performance in offense (p. 203). Hence, NBA players dedicate themselves profoundly in playing basketball and put in a lots work. In addition, striving for a long-term new contract with a huge amount of money may act as one reason that NBA players play hard and dedicate efforts in their contract year.
Moreover, some other factors benefiting NBA players to earn lots of money, for example, the size of NBA is relatively smaller comparing with other sports and some states have lower income-tax such as Florida. Football might be one of the most popular sports in the United States, so does baseball. These two leagues also make a huge amount of annual revenue. However, NBA players average salaries are much higher than players from another two leagues, which may cause by NBA has fewer players. Ziller (2016) states the size of National Football League (NFL) is near four times of NBA with 53 players in each team comparing with NBA’s 15, although it makes twice more amount of revenue than NBA does (p. 3). As a result, the amount of money distributes to each player has significantly decreased Baseball teams which include 25 players in each team have the similar issue. Moreover, lower state income tax can become another important factor in how much the NBA players can make. For example, Engler (2011) conducts a study to examine the difference in income tax among different states, and he finds that players may obtain more money in Florida because it has a much lower income tax which benefits them with a higher salary after tax (p. 602 & 606). Therefore, choosing a team within states of lower income tax to play can be beneficial for NBA players to make more money.
Although there are many beneficial factors and substantial reasons for NBA players to make a massive amount of money, they still have a top limit with the amount they make, which is known as the salary cap. Engler (2011) defines the NBA offers the salary cap for both teams and individual players in order to maintain competitiveness and avoid super teams (p. 605). Salary cap has existed for many years. The NBA salary cap was introduced back to the 1984-1985 season (Lyons Jr et al., 2015, p. 2). The Salary cap was created because it has many functions. For instance, Staudohar (1998) states NBA created the salary cap to limit the amount of money they can pay an individual player. In addition, it may prevent high paid teams to sign more expensive players and hence help teams with low payment to chase better players which are free agents (p. 3 & 6). One goal of limiting a player’s maximum salary and a team to sign many expensive players is to help with the games’ competitive balance. Couture (2016) claims the use of salary cap is to improve the games’ competitive balance (p. 12). Hence, a player may not earn too much percentage regarding his team’s salary cap limit. Hence, Couture (2016) claims a player can only make up to 35% of the team’s salary cap due to his performance and years played (p. 6). Thus, NBA players can only make some part of the salary cap from their teams. As a result, NBA players cannot make a limitless amount of money as some people considered.
However, people saying salary cap prevents NBA players making more money can be wrong. Lyons Jr et al. (2015) states NBA salary cap is adjusted by many other income factors such as TV contract and tickets selling. The recent massive TV contract brings a 40% of salary cap increase for teams and an individual may earn $3 million more (p. 3). In addition, researchers find that limiting a player’s salary does not actually improve the competitive balance. Noll claims salary cap will not help the weak teams because the players will not match up with the ones from better teams (As cited in Staudohar, 1998, p. 6). Therefore, salary cap should not become one good reason to limit NBA payer’s income because it associates with many other factors which may actually bring players more money and it does not necessarily benefit the games.
In conclusion, NBA players are making a massive amount of money and they are the group of people who get a great deal of attention. They become super wealthy for many reasons. One is because the NBA has many advertising supporters such as ESPN and Turner Sports, which made the new signed $24 billion TV contracts with NBA. In addition, NBA players themselves are very talented human beings who are the very limited sources of high demands. Furthermore, a small roster size and lower state income tax can also benefit the NBA players to make more salaries comparing with players from other leagues. People like to consider NBA players make money easily and take it for granted. However, it is not true because NBA players generally dedicate themselves in order to become super stars. Though salary cap seems to limit NBA players’ salaries, it should not become a real reason because it sometimes increases NBA players income.