Ron L. Brown
It is now June, which means the NBA and NHL have wrapped up their regular seasons and the playoffs are well underway. Games will mean so much more and play will intensify. All that “rest load” talk goes away and players will leave it all on the court to lift the Larry O’Brien trophy as champions.
The postseason is where players create and cement their legacies. It’s also a chance to make some extra money to go with that fame and glory. Here’s a breakdown of how this can happen:
Salaries
Some leagues see players make some major windfalls with playoff success. The National Basketball Association is not one of them.
The players have negotiated a strong position in the collective bargaining agreement, or CBA. Most names in the league, especially the big ones, have all their salaries guaranteed. While the money may be distributed in signing bonuses or regular salary, that money is theirs, regardless of the team going all the way or “rebuilding”. That money usually gets paid out throughout the calendar year, with rare exceptions.
The Miami Heat have 16 players on the team’s payroll that count against the salary cap. In an analysis of each player’s contract terms by Spotrac, none of them have a cent of incentive money listed in their deals. All that money is guaranteed. Under these favorable market conditions, what reason is there to tie a player’s fortunes to the chaotic, unpredictable scenarios of the NBA playoffs?
For those who don’t have as much guaranteed money, like NFL players, postseasons can mean bonuses and contract elevators that might dwarf regular season pay. A prime example of this was Odell Beckham, Jr. and his deal with the Rams this past season. According to Sports Illustrated, he signed with LA for $750,000, including $500,000 on his signing bonus. He then managed to hit every postseason incentive in the contract:
- $500,000 for winning the Wild Card Round
- $750,000 for winning the Divisional Round
- $750,000 for winning the NFC Championship
- $1 million for winning Super Bowl LVI
In total, Beckham collected $3 million in playoff kickers, four times the value of his guaranteed money from the regular season.
Playoff Shares
Most sports fans have heard of playoff shares. This is revenue collected from ticket sales for the scheduled games of playoff series, with a specific allotment reserved for paying players. In the NBA, this pool of money comes from the first four games of all series, since now eachone is best-of-seven. If a series goes to five games or beyond, that money is usually not shared with players.
The share pool has grown over the years. For the 2022 postseason, it is estimated to be over $23 million. Here’s a breakdown from The Sports Economist of what teams will receive for their playoff progression:
- Make the playoffs (Conference Quarterfinals): $347,545
- Make the 2nd round (Conference Semifinals): $761,079
- Make the Conference Finals: $1,444,442
- Make the NBA Finals: $2,732,699
- Win the NBA Finals: $4,124,054
This may seem like a nice chunk of change but remember that these totals are for 15-player rosters. Players can also vote shares for other people, like coaches, staffers, and players who left the team or didn’t play due to injury.
If the shares are left to 15, that means a NBA title can earn each player around $275,000. According to Spotrac, that’s slightly lower than the NFL’s guaranteed postseason payouts, which saw each player on the Rams get $300,000 for winning the Super Bowl, earned in about half the time of the NBA’s postseason.
Other Opportunities
As per the rules of the CBA, players must make a number of promotional appearances, either alone or with teammates, for the franchise. Each of these appearances earn $3,500 for the first eight, and $4,500 for each after the threshold. Teams might schedule appearances between rounds of the playoffs, which can mean a little extra money.
During the regular and postseason, any road games mean players will get per diem money for food when teams don’t provide meals. For the NBA, that can mean around $150 per player when away from home. Of course, the pros are expected to make good choices when going out to eat. The extra money means better restaurants and healthier options are available.
Ron L. Brown is Co-Founder of Athlete Essentials, a wealth management firm dedicated to helping professional athletes make the most of their career earnings. Athlete Essentials takes pride in their work with athletes to develop a strategy for sound investment decisions, cash flow management and business planning. Learn more at athessentials.com.
