Let’s Face The Facts: NBA Superstars Are Underpaid

NBA Superstars Underpaid with the salary cap

Though the above is a live look of the New Orleans Pelicans ticket staffers learning their team won the 2019 NBA Draft lottery and right to draft Zion Williamson, it’s safe to say the Brooklyn Nets sales team experienced this same joy at the start of NBA Free Agency. The signing of Kevin Durant and Kyrie Irving signifies a coming of age story for the Nets and the end of an era for their crosstown rival. Once heralded as the “Mecca” of basketball, the aura that surrounded Madison Square Garden is gone. New York Knicks’ owner James Dolan was reportedly hesitant to sign Kevin Durant to a maximum deal. But if your team’s president has to release a statement responding to angry fans, that’s clearly not the correct business decision.

NBA Star Market Value

NBA Superstars Drive Revenue

People pay to see stars, and teams know it. Immediately after signing the two-all stars, an all-out race for Nets season tickets ensued. Currently, the cheapest ticket available is $4,000 a seat, which is quite an expense for a team that won a total of 48 games prior to the 2018-2019 NBA Season.

NBA stars do more than put fans in the seats; they serve as an economic catalyst for all other aspects of their team’s city. When Lebron James announced his “Decision” in 2010, not only did he take his talents to South Beach, but also $48 million in annual revenue. When James re-signed with Cleveland in 2014, Professor Leroy Brooks estimated his return added nearly $500 million to the local economy. The Cavaliers suffered another negative swing when Lebron moved west to the Los Angeles Lakers.

NBA teams lack profitability and marketability without a star player. Fans routinely discuss how players aren’t worth a certain contract. When Kobe Bryant became the league’s highest-paid player in 2014, he did so to show players should not feel forced to take less than their worth and stated:

“Athletes are the ones that are in the public eye the most. And so their salaries are constantly talked about, so it’s very easy to look at the athlete and say, ‘You should be doing more and you should be taking less,’ when the reality is that your market value is so much higher than what people understand.

” ‘Yeah, yeah, yeah, but you still should be taking less to win. Why do we have to do that? Because the owners locked us out and imposed a hard cap where we ‘have to’ take less in order for them to generate more revenue. Right? But meanwhile, they go and sign a TV deal that’s a billion dollars up from the last one, but that doesn’t get talked about. Nobody complains about that.”

Credit: CBS Sports

Maximum Value Under The NBA Collective Bargaining Agreement

Credit: Larry Coon / CBA FAQ

Maximum salaries are the product of the 1998-1999 NBA lockout initiated by owners who feared player salaries were getting out of control. After the Minnesota Timberwolves gave 21-year old Kevin Garnett an extension worth six years, $126 million, billionaire owners decided they couldn’t “have the inmates running the prison.”

Now, maximum salaries are dependent on the player’s years of services. In a truly open market, superstar players such as Lebron James, Kevin Durant, Giannis Antetokounmpo, Kawhi Leonard, James Harden, Stephy Curry, Joel Embiid, and Anthony Davis would be worth at least $75 Million. Joel Embiid, Ben Simmons, Klay Thompson, Kyrie Irving, Russell Westbrook, and Nikola Jokic would easily pull in contracts worth $50 million to $60 million per year. Hell, Zion Williamson is on the verge of signing a $100 million shoe deal; it makes no sense that his perceived NBA value is $45 million over four years.

Despite the league’s continued growth, it’s unlikely that the cap will rise to a level that will allow players to receive their true worth. While it may be hard to quantify the value a superstar brings, one method would be to allow teams the ability to sign a player outside of cap space. Instead of retiring jerseys, if owners truly want to show their appreciation, this is the route they should take. Then, the future Lebrons, Durants, and Antetokounmpos would be able to live in the world Kobe hoped to create for his fellow stars.

Follow Alan Wilmot on Twitter and Instagram @alanwilmotlaw

Negotiating the CBA: The Biggest Issues Facing the NFL and NFLPA

CBA: NFL NFLPA Roger Goodell DeMaurice Smith

The above is a far cry from 2017 when NFLPA Executive Director DeMaurice Smith declared the likelihood of a strike or lockout of the 2021 NFL Season “almost a virtual certainty.” What’s changed? At the time, one major issue was the league’s position on national anthem protests, which was eventually settled after the NFLPA filed a grievance in 2018. The NFL’s profitability is also motivation for resolution, with yearly revenue approaching nearly $14 Billion per year.

No major issues have surfaced during the groups’ two formal sessions, with NFL Commissioner Roger Goodell describing the discussions as “direct and open.” But it’s a long way to 2021. Below are some of the biggest issues surrounding extending the current NFL Collective Bargaining Agreement:

Stadium Credits

It’s laughable a group of billionaires believe they are entitled to benefits to finance stadiums. Stadium credits are player-funded allowance, taken from NFL revenue before it is split with the players to alleviate costs associated with construction. Owners used their full amount of credits provided with the 2011 CBA. With the league looking to build new stadiums in Las Vegas and Los Angeles and renovate existing ones in other cities, this topic has developed into a strong negotiation point.

Players receive roughly 47 percent of revenue earned by the league, down from 50 percent due to the last round of negotiations. With stadium credits decreasing the total amount of sharable revenue, the NFLPA must fight to (1) decrease the amount of allocatable stadium credits or (2) increase their revenue share. Otherwise, it will be the players, and not the billionaire owners, left footing the bill.

Marijuana

Credit: The Dan Patrick Show

Last week, the NFL and NFLPA announced the creation of a “Joint Pain Management Committee” to research pain management and alternative therapies. In other words, the NFL is slowly opening the door to players using marijuana as a means to combat injury. On the heels of XFL Commissioner Oliver Luck stating the XFL would “prefer not to test for marijuana,” coupled with the legalization of marijuana in California, Nevada, Colorado, and other states, it only makes sense for the league to modify its stance.

Two-time Super Bowl champion Chris Long recently admitted to using marijuana throughout his playing career. The NFL tests for the drug once per year, usually within the first two weeks of training camp. Once passed, players are free to smoke at will. At this point, the NFL’s policy is merely for show, and the next iteration of the CBA should remove punishments for use.

Guaranteed Contracts

Kirk Cousins is the first quarterback in NFL history to sign a fully guaranteed multi-year deal. Notwithstanding, players still struggle to obtain their worth. This is the reason why players such as Russell Okung and Todd Gurley believe a strike is necessary.

Owners of one of the world’s most violent sports should not be able to escape paying fully guaranteed contracts. Why this issue isn’t presently being discussed brings into question the seriousness of the current state of negotiations. NFL careers can end at a moment’s notice. If a structure for greater guarantees is not obtained now, the NFL will continue to kick this bucket down the road.

Follow Alan Wilmot on Twitter and Instagram @alanwilmotlaw

Mike Trout Still Underpaid After 12-year, $430 Million Extension w/Angels

Mike Trout signed $430 Million contract with Los Angeles Angels but he is still underpaid

Imagine signing the largest contract in professional sports history and yet the general consensus is that you’re still being underpaid? Welcome to the life of Mike Trout.

Los Angeles Angels of Anaheim Gear at Fanatics.com

Mike Trout is finalizing a 12-year, $430 million extension with the Los Angeles Angels, which would be the richest contract in professional sports, breaking the 13-year, $330 million contract that was signed by Bryce Harper almost three weeks ago. Trout’s contract has an AAV of $35.8 million, which is also a record. If Trout became a free agent in 2020, the bidding war for his services would have been insane. Teams would have easily surpassed the $500 million threshold had he listened to other offers and there’s no doubt in my mind that Trout would have gotten to $500 million. He’s worth every single penny so congrats to the Angels for locking down a once-in-generation player for a bargain.

https://twitter.com/sung_minkim/status/1108019170212352003

Mike Trout is universally regarded as the best player in baseball. In fact, Trout is one of the greatest baseball players of all-time through his first 8 years. There’s historic numbers, and then there’s Mike Trout numbers. Let’s take a look at some of Trout’s stats. I hope you are sitting down because they are mind boggling. Also, remember that Trout is only 27-years old and has played in 8 seasons. (Trout debuted in 2011, but only played in 40 games in his first season.)

  • Career .307/.416/.573 hitter with 240 home runs, 648 RBIs, 793 runs and 189 stolen bases.
  • Trout’s career WAR (Wins Above Replacement) is 64.3. That’s the highest ever by a player entering his age-27 season. The average Hall of Fame WAR is 69.
  • In 7 full seasons, Trout has been a All-Star 7 times.
  • Trout has been the MVP or runner-up in 6 of 7 full seasons (2 MVPs, 4 runner ups). The only time he was not the MVP or runner-up happened in 2017 due to injury. Trout only finished fourth in MVP voting that season.

Value of the G.O.A.T

As you can see, Mike Trout’s value is priceless. If the Angels paid him $1 billion, Trout still lives up to that contract. If he retires today, he’s in the Hall of Fame.

Los Angeles Angels of Anaheim Gear at Fanatics.com

Although Trout is the best player in the MLB, he’s the furthest thing from a rockstar. In fact, Mike Trout is not as popular as you would think. Last year, Trout ranked 11th in jersey sales. There has been a narrative forming that the MLB does not market Trout enough and some of that has truth to it. Trout and the Angels are scheduled to be on national television 10 times with three of them being out-of-market only games on MLBN. The Angels are not very good and the MLB tends to focus on rivalries in big markets for national games (Think Red Sox – Yankees), but wouldn’t it make sense to put Trout on national TV especially when he travels to the East Coast? To put this into perspective, LeBron James, arguably the greatest player, and the Lakers are scheduled to make 31 appearances on national TV in 2018-2019. It also hurts that Trout has only played in 3 playoff games, which is more of a reflection on how poorly the Angels have been since 2011.

Plus, Trout is very laid-back and low key. He doesn’t crave the spotlight or make it a point of emphasis to become a star, which frustrates Rob Manfred, who said, “He [Trout] has to make a decision to engage. It takes time and effort.” I live in New York. If Mike Trout were to walk down a New York City street in regular clothing, out of 10 people, how many people would recognize him? One, maybe two? Seriously, if you saw the greatest baseball player in the world at a deli in NYC with his wife, would you recognize him?

It’s not a knock that Mike Trout doesn’t want to be a huge star in the public realm. That’s just how he rolls. Trout deserves to do whatever he wants. And you know what? He has earned that right. Instead of focusing on how to make Mike Trout bigger star, let’s just appreciate him for what he is, which is the greatest baseball player on Earth.