Being the premier professional men’s basketball league in the US, the NBA has some big money involved in it. This write-up provides information on the salary cap and some of the most highly paid superstars.
The National Basketball Association (NBA) is a major basketball league in North America. It comprises 30 teams that are divided into 2 divisions – Eastern Conference and Western Conference, each having 15 teams. The Eastern and the Western Conference are further divided into 3 divisions each, with 5 teams in each division. So, in all there are 6 divisions with 5 teams each, forming two Conferences of 15 teams each. Every team plays a total of 82 games every season, playing every other team in the league at least twice. After this regular season, the playoffs take place between the top 8 teams from each conference with the final taking place between the 2 best teams in each conference after the playoffs.
Salary Cap
The NBA Salary Cap is the most important factor in determining the salaries. It is the maximum amount set by the National Basketball Association that the teams can spend for paying their athletes. The league’s total revenue in the previous season determines the salary cap for the current season and this amount is different every season. It is not strictly controlled. Therefore, there are a lot of loopholes and exceptions, which the team managers exploit to their advantage, so that they are able to spend more than the specified limit.
CBA Agreement
The contract between the players association and the team owners is known as the Collective Bargaining Agreement (CBA). This agreement decides various policies regarding salary cap, contracts, trades, and the revenue distribution. The CBA has set some rules regarding the maximum amount a pro can receive as salary, which depends upon his experience and the cap for that season. According to this rule, a pro with 6 years of experience or less receives a maximum of 25% of the total salary cap. A pro with more than 6 years and less than 10 years of experience can earn a maximum 30%, whereas a pro with more than 10 years of experience can earn 35% of the salary cap.
Types of Agents
The type of free agent the player is, also contributes in determining the salaries. According to the CBA, there are 2 types of free agents: restricted and unrestricted. A restricted free agent can sign with another team, only after his current team refuses to pay him more than what he is being offered. An unrestricted free agent can sign with any team he wants. To become an unrestricted free agent, a pro must complete at least 3 seasons.
Sign and Trade Agreements
Let us assume that there is a certain player A who is currently playing for team Y. Now, A is on his way to become an unrestricted free agent in the next season. If he does so, then team Y gets nothing out of it, as it is obvious that the other teams will sign him. So, team Y extends A’s contract by giving more money or the same amount which A would get, by playing for any other team. Now, if a team wants A, it will have to pay him more money than his current extended contract, while team Y gets another player in return as per the trade. In this way, the players make more money, and the current team also gets another good player in return from the other team.
Signing Bonuses
When any team signs a particular athlete, they pay him a certain amount of money, which is the signing bonus. This amount is apart from the salary that he receives and is spread across the number of years in the contract. These sportsmen make a lot of money through signing bonuses alone.
Rookie Salary Scale
The rookie salary scale is the amount decided by the CBA that needs to be paid by the teams to its rookies. The rookies who get selected in the first draft itself, get the highest salary followed by the ones picked in the second draft and so on. The contracts for the rookies are of 2 years and they have an option of changing teams in the 3rd and 4th year.
Highest Paid
The following is a list of highest earning professional basketball athletes for the 2013-14 season:
| Name | Team | Salary (USD) |
| Kobe Bryant | L.A. Lakers | $30,453,805 |
| Dirk Nowitzki | Dallas Mavericks | $22,721,381 |
| Amar’e Stoudemire | New York Knicks | $21,679,893 |
| Joe Johnson | Brooklyn Nets | $21,466,718 |
| Carmelo Anthony | New York Knicks | $21,388,953 |
| Dwight Howard | Houston Rockets | $20,513,178 |
| Pau Gasol | L.A. Lakers | $19,285,850 |
| Chris Bosh | Miami Heat | $19,067,500 |
| LeBron James | Miami Heat | $19,067,500 |
| Dwyane Wade | Miami Heat | $18,673,000 |
Average Salary
The average salary is calculated on the basis of the total salaries paid by all the teams in the previous season. It is useful for determining a player’s salary during transfers and trade-offs.
NBA salaries are way more than the NFL, but less than the National Baseball League. In spite of this, with an average salary of just under USD 6 million, basketball in the USA is intensely competitive.
