As the college hoops season winds down (we still have, arguably, the most anticipated Final Four ever – which becomes even more so should Kentucky prevail Saturday), the NBA is poised to take over the nation’s sports fans. Baseball is still 162 games from drawing interest from all but its most ardent supporters and, other than the NFL draft, football will take a back seat interest-wise as well. What about hockey, you ask? Hockey fans and basketball fans are, for all intents and purposes, mutually exclusive groups.
As the NBA playoffs start the best-of-seven, best-of-seven, best-of-seven, best-of-seven, there certainly will be plenty to speak, write and sideline report about but, due to the fact the media has grown exponentially (including social media), rumors, gossip and innumerable “back stories” will surface as each individual attempts to out-do his or her competition. One topic that is always of interest is NBA players’ salaries.
The money NBA players make is, to use the current slang, stupid. With a new collective bargaining agreement on the horizon, players’ salaries are going to go higher. Quite a bit higher. Why is that? The reasons are as numerous as there are teams in the playoffs.
Let’s take a look at what NBA guys get paid. First of all, if anyone wants to know what a particular player is pulling down (and all are pulling down a ton more money than they are rebounds – with the possible exception of DeAndre Jordan), all that’s necessary is to Google your favorite (or in some cases, least favorite) player. As you’re doing so, think about how violated you would feel if discovering what you make was so simple.
In no particular order, the following reasons are what drive players’ income through the roof. Those in the financial know commented that when Steve Ballmer shelled out what was, at that time, 1/10th of his net worth for the Los Angeles Clippers, i.e. $2,000,000,000 (still amazed at what it actually looks like “written out”), he enabled Michael Jordan entry into a club who, until that time, refused to allow His Airness membership. It’s called The Billionaire’s Club.
Ballmer’s bid seemed extremely generous – since it was $400 million more than the second place bid. With $400M you could buy “17 NHL franchises, … book a trip to space, fund a major movie or buy all ten of the most expensive cars in the world,” according to a piecepenned last year. So Ballmer might have overpaid a tad but when you have $20 billion (allegedly a few B’s more after last year’s stock market boon), why leave getting what you want to chance?
Steve Ballmer is no fool. He didn’t inherit his wealth and, while he does act like the ultimate fan, obviously he didn’t just buy the franchise for the great seats that came along with the price tag. Typically, professional franchises in the four major sports in the U.S. increase in value. Certainly, Ballmer isn’t planning on making a windfall this year – or maybe this decade but if or when he decides it’s time to part with his club, rest assured, he’ll be making a profit. How can that be? The answer is due to multiple revenue streams.
Start with the nine-year, $24 billion media-rights deal with ESPN and Turner Sports. $2.6 billion a year seems like – no, it doesn’t seem like, it is an unbelievable amount of money. Even if you work in Congress. How can television afford to spend that kind of dough? You can bet it’s not just to keep the product off of their competitors’ airwaves.
No. It’s because the TV people know they can recoup (and then some) the money from advertisers. You can almost see this coming, can’t you? Advertisers plan on getting rich(er) because we, the consumer, are influenced by what we see while watching games on the
tube flat screen. (They used to make money on us when games were on the tube. Now they make more. But how much sweeter is the picture!)
It’s not that simple. The NBA also makes money off of ticket sales, both seats and sky boxes. Remember how the line used to be, “A family of four can’t afford to attend a game?” Teams don’t care; the public isn’t who’s buying most of the seats anyway. It’s corporations, who use the tickets they buy to woo clients. However, it still eventually comes back to the consumer. Us. On that rare occasion a dad can bring his kid(s), he has to pay to park (ouch!) – and have you noticed that the concessions are quite a bit pricey (ouch!ouch!)? It’s just more money helping ease that two bil poor Steve Ballmer is in the hole.
Speaking of prices, NBA authentic jerseys have been slashed from $75 to only $60 (except for the “vintage” jerseys and, you know, the real good players). And what better way to tell your children you love them than to plunk down a C-note (a piece) for a personalized jersey? Your kid’s name on the back of his favorite team. Chances are that will never happen so you’d better buy it before the prices go up.
The minimum salary an NBA player makes for a season is a half a million dollars. The highest salary was Kobe Bryant’s $23,500 although LeBron James made close to $65M when endorsements were included. And why do companies pay athletes (and other entertainers – because, believe it, professional athletes are exactly that – entertainers) so much money to endorse their products? It ain’t because they need tax write-offs.
So the next time you hear somebody complain about how much money players make (even if that person is sitting to the left of the person sitting to the right of you), speak up and say:
“Hey, watch what you say. I’m partially subsidizing his net worth.”