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Lockout Update: Checks totaling $161 million being paid to players by NBA

by

By Chris Sheridan

Any day now, Kobe Bryant will receive a check in the mail for $1,984,400, courtesy of the NBA.

Rashard Lewis’ check is for $1,565,817.

Even oversized and overpaid Eddy Curry, whose name has come up in lockout talks as the symbol of what is fundamentally wrong with the NBA’s salary structure, is getting another windfall: $927,746.

The money represents the 8 percent of each player’s salary that was withheld from their paychecks last season under the NBA’s escrow tax system, which was put in place to ensure that the players received no more than 57 percent of basketball related income in the 2010-11 season.

A total of $161 million in escrow funds were withheld last season, and the league office sent a stack of more than 350 checks to the Players Association last week to begin issuing the refunds, SheridanHoops has learned.

In previous seasons, 10 percent of players’ salaries were withheld under the escrow system, and in most years only a portion was returned. But last season, the amount of salaries paid out by the 30 NBA teams came in well below 57 percent, meaning the players will get all of their withheld funds back as soon as they notify the union where they checks should be mailed.

In addition, the league office sent an additional $26 million in funds to the union to satisfy its obligation to pay out 57 percent of BRI. (The union is hanging onto that $26 million until a vote is held to determine how it should be distributed).

That means a total of $187 million is going from the owners’ wallets into the players’ wallets at a time when the owners are counting on the prospect of missed paychecks to help force the union to make additional givebacks in collective bargaining talks, which will resume today in New York after a 5 1-2 hour session Wednesday.

Also, much has been made of the fact that most players will not feel the financial pinch of a lockout until they miss their first scheduled paychecks on Nov. 15, but sources tell SheridanHoops that roughly 25 percent of players with long-term contracts are being paid on a 12-month schedule, meaning millions and millions of more dollars are currently being disbursed by the owners, whose own revenue streams for the upcoming season are imperilled by the prospect of a prolonged work stoppage.

Just a little more food for thought when the assertion is made that the owners hold all the leverage in this dispute because they are holding onto all the money.

That is just simply not the case, as locked-out players are learning this month as those withheld escrow funds are finding their way into players’ mailboxes.

Here are some lockout links from around the Web today:

_ Sam Amick of SI.com: Union director Billy Hunter at risk of a mutiny.

_ Adrian Wojnarowski of YahooSports: Angry agents still pushing for decertification.

_ Howard Beck of the New York Times: Stern and Hunter seemed unusually upbeat.

_ Steve Aschburner of NBA.com: Apparently, no new formal proposals were made.

_ Brian Mahoney of AP: Players to be briefed on progress of NLRB complaint.

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  227. Chris, your info that a sizable number of the players are on 12-pay schedule – haven’t you taken that to a wrong conclusion in your idea that players are still being paid and will continue to be paid for months to come?

    As I understand it, that 12-pay spreads a player’s pay over the full NBA year, and each year ends on June 30. The 2010-11 year (and its 12th check) were done by June 30, 2011. With the lockout commencing at that point, the 2011-12 season has not yet begun in any way and the players on a 12-pay are getting 1/12 of $0.

    If you are a player who’s been getting paid on a 12-pay, not only would you NOT be looking at continuing checks for months to come, but you also would have missed 3 paychecks already – July, August, and September – that you would otherwise have received. Am I missing something?

  228. “sources tell SheridanHoops that roughly 25 percent of players with long-term contracts are being paid on a 12-month schedule, meaning millions and millions of more dollars are currently being disbursed by the owners, whose own revenue streams for the upcoming season are imperiled by the prospect of a prolonged work stoppage.”

    But in the absence of a CBA would the owners be getting 100% of merchandising revenue or at least 100% of the cash flow temporarily til a deal is done? I would think so but it would be worth checking.

    Do their TV contracts generally have annual lump sum payments or quarterly or monthly payments? When specifically do the US networks with national NBA TV contract make their payments? Those details would add to the overall picture of immediate revenues and expenses faced by owners.

  229. lol — you *know* there are some owners out there who are wishing that the NBA didn’t make so darn much money last year.

  231. All very interesting, but I wanna read about how it is possible that according to the credible german newsmag “der spiegel” Dirk Nowitzki already got paid his entire salary for the 2011-2012 season in advance due to a clause in his contract signed last summer. Please Chris, report…
    great new site btw…

  232. NBA needs to adopt something similar to the NFL where a portion of the contract is guaranteed and the rest you will receive throughout the term of your contract and teams should be able to release players especially those they made a mistake of committing millions to…(eddy curry, etc)

    • nfl contracts are divided into a non-guaranteed salary and a signing bonus. they can drop the player and not pay the salary whenever they want for whatever reason (but they can’t get the bonus back).

  234. I have a feeling that they are going to make a new rule in honor of Eddy Curry. … . the Eddy Curry rule being a non-guaranteed contract and will be dependent on performance!!!

    thats the main problem in todays game- once the players hear that word guaranteed they start to relax and do not play with the same passion as they were when fighting for that contract!!!

    • it’s not like teams can’t look at how a guy played in the years leading up to his contract year. not everybody thought jerome james deserved a long term contract after one good playoff series.

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