How NBA Players Make Their Salary

How NBA Players Make Their Salary
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How NBA Players Make Their Salary
Introduction
The National Basketball Association (NBA) in the United States is the greatest basketball league in the country and across the globe. The league's structure is peculiar and different from other sports leagues because the players act as organizations. Their teams of staff separate from that which the players represented on the playing field. Accordingly, the discipline and professionalism which the players depict are emblems representing the nature of the organizations that they represent. Coherently, entry into the league is highly competitive, and very few people succeed in becoming NBA players. One of the contributors to the high level of competition is the players' lucrative pay from the organizations. Notably, NBA players receive exorbitant compensation packages because the league is most-watched and discussed among Americans and mainstream media.
The increasing pace of salary caps increments each year leads to a growing concern on whether the players' compensation remains fair. Moreover, there is expanding flow of and participation by international players in the league. This observation adds to the justification of a study that investigates the payment of NBA players. Withal disparities about compensation remain highly discussed when considering the state and future of the NBA, considering that factors such as race, nationality, and extent of experience render players receive varying wages. The present study focuses on the impact of nationality, performance of players, state of operation, and loyalty on the compensation of NBA players. The investigation aims to unravel the rationale employed in determining the payment of NBA players and determine whether there is equality exhibited in compensation methodologies.
Literature Review
Despite the tremendous success of the NBA in popularity and wealth, one of the concerns that remain highly heated is the players' salaries. Most of the debates on media and even among citizens aim to justify or criticize the capacity to which NBA players deserve or do not deserve the wages they received. The significant difference in pay between players in the same league leads to suspecting players who received inflated salaries. From one year/season to another, there is an increment of salary caps. Thus, a literature review on the relationship between NBA and inflated salaries is required. It necessitates the division of the present chapter into four main sections: structures of payment and salary caps, associations of different stakeholders, performance players, and equality of wage.
* Structures of Payment and Salary Caps
The NBA frequently revises pay structures, rendering players to earn differently from one season to another. Engler (2011) informs that the NBA place similar salary caps for the participating teams in pursuit of creating a player for healthy competition. Nonetheless, the case was different before this policy, considering that teams would set their salary caps. The Collective Bargaining Agreement (CBA), as the governing agreement of the NBA, did not require teams to have payment limits for compensation, resulting in wealthy teams exceeding their set salary to sign the best talent/players as they could afford. Although there are salary caps with CBA, the minimum wage for different players varies depending on their experience in the team. As a result, some players earn far much greater than others. For instance, Hastings and Stephenson (2015) found that some teams would allocate up to 35% of the team salary to the most experienced or top player, causing the salary of first-year and bench players to reduce significantly. Coherently, players not signed in during the first round of drafting and rookies received very low pay, the minimum wage possible. Each season, the salary caps for the top players increase, leading to constriction of the amount given to those of less experience. Based on the NBA minimum salaries for 2019/20 (2019), the minimum wage of a first-time player in the league and a person with one year of experience are $893,310 and $1,445,697, respectively.
Interestingly, the players and the association (NBA) seem okay with the situation since the new players do not want to miss the opportunity to play in the most adored league in the United States. The case becomes possible despite the overall caps through mutual agreements between the players and the association. Coherently, the relationship between players and teams plays a significant role in developing and signing a contract.
* Associations of Different Stakeholders
The desire to triumph over other teams renders all NBA teams attracting the best performing and disciplined players. The cost of deriving this objective is high since the team's sustainability requires balancing a wide range of factors, such as the success of the team in the league, fan base, and financial performance of the organization. According to Tenkorang, Dority, and Law (2014), most teams prioritize the team's success in the league and maintain or expand the fanbase. The article also informs that teams prefer uneven distribution of salaries, whereby the top four players receive most of the pay. The teams depend on these major players to secure a high ranking among fans and league performance. Chicago Bulls recognize being the pioneer of the strategy, considering that it invested heavily in attracting the best talent pool to emerge victorious in the seasons. In the 1990s, it paid top players more than $69 million, except in the 1998 season when it did not appear among the top five teams with the greatest salary amounts for their players (Sale & Hunter, 2009). The amount paid to players of Chicago Bulls decreased drastically from 1998 since most of the top players retired or shifted to other teams. However, the decrease in pay rendered the team has the highest operating income in the league for the greatest part of the 2000s (for seven consecutive years). Sale and Hunter (1998) also informed that although the team's performance plunged, the fan remains large due to prior successes. As a result, numerous teams emulate the approach currently to ensure sustainability and maintain the relevance of the team despite performance fluctuations. Therefore, player's performance plays a key role in determining their salaries.
* Performance of Players
Team players consider their performance to be the essential factor to safeguard due to the high level of competition, which the NBA exhibit. Hundreds, if not thousands, of college and international players compete to secure positions in NBA teams each year, and replacement of the existing players in the league is not very challenging. The consideration of the performance by the team player is related to both competition and exercising during preparations. The significance of emphasis is that performance determines the salary which the players receive. According to Hastings and Stephenson (2015), a player contributing to the team in NBA games is an essential indicator of the wage he receives. As such, the capacity of a player to make the team rely on his performance for the team's success provides a high bargaining power of the athlete in developing and signing contracts. Teams working as organizations find attraction in top-performing players because of the accommodated sense of safety and alleviate the risks associated with less experienced or young players. Ducking et al. (2014) also stress the significance of players' performance by stating that the amount for signing veteran players is higher than that of new players since team management count on the performance as a factor of the speedy return of the investment considering that the seasoned players already have established brands. However, the method of considering performance is not only through the previous years but also throughout the players' career. Correspondingly, experience is a determinant of performance. The approach is primarily applied in recruiting players from abroad since they do not have previous experience in the NBA. The method favors international players since they do not enter the league as rookies. Therefore, the decision to focus on performance boost diversity in the NBA, justifying an investigation of equality's degree amidst the high degree of players' diversity.
* Equality of Wage
Discussions in NBA about wage remains inconsistent, especially today in the United States where compensations of players are the highest throughout history. The criterion for determining players' wage leads to significant variations of paid amounts since the players come from different backgrounds. International players receive less pay than those born in the United States because the former are citizens of the country. Nevertheless, the inequality in pay based on place of origin is increasingly disappearing because of global scouting and the extension of NBA affairs to the international level (Hoff...