With the NBA Finals approaching, experts are beginning to project the salaries for next year’s rookie class. In the 2015 draft, the highest pay went to #1 overall pick Karl-Anthony Towns of the University of Kentucky who earned a staggering $25.7 million from the Minnesota Timberwolves over his rookie contract. This included a guaranteed $11.6 million during his first two years with the team.
After Towns was D’Angelo Russell from The Ohio State University who made $23 million over four years with the Los Angeles Lakers. One of the most popular college basketball players, Frank Kaminsky, from the University of Wisconsin, was drafted by the Charlotte Hornets and got an $11.8 million contract salary. The biggest winner was Coach John Calipari from the University of Kentucky who sent four players in the top 13 to the NBA for a total of over $55 million.
Of course he lost four of his starting five but Calipari has sent 23 of 47 players during his tenure to the NBA.
NBA Rookie Compensation
The main reason why rookie hold-outs are non-existent in the NBA (unlike the NFL) is that rookie salaries are already determined by the Collective Bargaining Agreement (CBA) which is negotiated between the players union and the league in advance. Although there is some flexibility among rookies with regards to their first year contract, they have almost no leverage and must accept the allotted scale as set forth by the CBA.
According to the rules, every first-round rookie contract is guaranteed for two seasons with a team option in the third and fourth year of the deal. Rookies have the ability to sign for as low as 80-percent or as high as 120-percent of their scale amount within one year. However, it is unusual for the rookie to sign for less than the entire 120-percent. The scale amount is calculated based on the rookie’s draft position and is set within the first there years of the agreement and the fourth year is based on a specific percentage from the third year. It is also important to highlight that only the first round draft picks are eligible for scale contracts. Therefore, in the even that a rookie signs for the entire 120-percent deal, overages do not contribute to the team’s salary cap status.
There has been a continuous argument that sports agents do not provide value to NBA rookies with regards to their contract. However, the best agents ensure that the player signs the 120-percent maximum deal and the team has the incentive to move forward with the third and fourth years. Also, good agents invest in their clients draft preparation but never receive a commission on rookie contracts, even if the maximum 120-percent is signed by the player. Therefore, agents solely rely on commissions from marketing deals which allows them to close their clients. The average commission rate is around 20-percent which also helps build equity for to ensure the rookie’s second contract is negotiated.
Example of Top First Round Picks
The first round, first pick can expect a first year salary of $4.7 million, second year of $4.9 million, third year of $5.1 million and a 26.1-percent increase in the fourth year.
The second pick in the first round will receive $4.2 million the first year, $4.4 million the second year, $4.6 million the third year and a 26.2 percent increase the fourth year.
The fifth pick will receive a $3.1 million first year salary, $3.2 million the second year, $3.3 million the third year and a 26.7-percent increase the fourth year.
The seventh pick can expect $2.5 million the first year, $2.7 million the second year, $2.8 million the third year and a 27-percent increase in the fourth year.
The 10th pick in the first round will earn $2 million during the first year, $2.1 million in the second year, $2.3 million in the third year and a 27.5-percent fourth year salary increase.
Top 20 Draft Picks in 2015
The following is a list of the highest paid first round rookie contracts from the 2015 draft. The salaries will be comparable for the 2016 draft.
Pick 1: Karl-Anthony Towns – Minnesota – $11.6 million (2 years), $25.7 million (4 years)
Pick 2: D’Angelo Russell – Los Angeles – $10.4 million (2 years), $23 million (4 years)
Pick 3: Jahill Oakfor – Philadelphia – $9.3 million (2 years), $20.6 million (4 years)
Pick 4: Kistaps Porzingis – New York – $8.4 million (2 years), $18.6 million (4 years)
Pick 5: Mario Hezonja – Orlando – $7.6 million (2 years), $16.8 million (4 years)
Pick 6: Willie Cauley-Stein – Sacramento – $6.9 million (2 years), $15.3 million (4 years)
Pick 7: Emmanuel Mudiay – Denver – $6.3 million (2 years), $14 million (4 years)
Pick 8: Stanley Johnson – Detroit – $5.8 million (2 years), $12.8 million (4 years)
Pick 9: Frank Kaminsky – Charlotte – $5.3 million (2 years), $11.8 million (4 years)
Pick 10: Justise Winslow – Miami – $5 million (2 years), $11.2 million (4 years)
Pick 11: Myles Turner – Indiana – $4.8 million (2 years), $10.8 million (4 years)
Pick 12: Trey Lyles – Utah – $4.5 million (2 years), $10.3 million (4 years)
Pick 13: Devin Booker – Phoenix – $4.3 million (2 years), $9.9 million (4 years)
Pick 14: Cameron Payne – Oklahoma – $4.1 million (2 years), $9.6 million (4 years)
Pick 15: Kelly Obure – Washington – $3.9 million (2 years), $9.2 million (4 years)
Pick 16: Terry Rozier – Boston – $3.7 million (2 years), $8.7 million (4 years)
Pick 17: Rashad Vaughn – Milwaukee – $3.5 million (2 years), $8.3 million (4 years)
Pick 18: Sam Dekker – Houston – $3.3 million (2 years), $7.9million (4 years)
Pick 19: Jerian Grant – New York – $3.2 million (2 years), $7.5 million (4 years)
Pick 20: Delon Wright – Toronto – $3 million (2 years), $ 7.2 million (4 years)
Based on these salaries from 2015, it really pays to be a first-round draft pick. Players who are selected in later rounds do not make nearly as much money. The later they are picked, the less money they make and the last picks come into the NBA at the league minimum. However, it gives them an opportunity few have to make it to the most prestigious basketball league in the world and show their stuff.
Any opportunity that can be earned in professional sports is positive for that player, even if they aren’t making the same amount of money as a first round pick. Nevertheless, the player is still making the rookie league minimum which is $543,000 for the 2016 season and increases significantly as the player achieves more experience. Of course every players strives to be a hall-of-famer making millions of dollars per year and having their name in the record books.