How Agents Make Money Out Of Rookie Contracts
September 26th, 2014

(originally posted elsewhere) The general rule for agents is that their earnings off of negotiated player contracts are capped at 4% of the player’s salary. Indeed, 4% is an assumed amount unless otherwise agreed upon, as outlined in section 3(B) of the Standard Player Agent Contract: If the Player receives compensation in excess of the minimum compensation applicable under the CBA for one or more playing seasons, the Agent shall receive a fee of four percent (4%) of the compensation received by the Player for each such playing season, unless a lesser percent (%) or amount has been agreed to by the parties […] In practice, this 4% is rarely deviated from. 4% is the norm, and rarely is it any different, especially in contracts involving the more powerful agents. There was an intriguing case involving Antoine Walker and agent Mark Bartelstein some years ago, in which Bartelstein had agreed the fairly unusual concession upon Antoine’s signing of a contract with Atlanta of lowering his standard fee from 4% at the time of signing to 3%, at the player’s discretion, if it was felt that Bartelstein ‘wasn’t doing a good job’. (The case went to arbitration over a disagreement over quite what that phrasing meant, and of how much Walker had to pay him. It was not in dispute that Walker owed Bartelstein, but merely how much, based on the arbiter’s findings of whether Walker was entitled to pay only 3% or not. Bartelstein won the case and was awarded a judgement of $671,373.) But this case stands out for its novelty, and is certainly not par for the course. However, the same handbook adds a few other criteria. In section 3(A) immediately preceding the previous paragraph, it states this: If the Player receives only the minimum compensation under the NBA-NBPA […]

Posted by at 6:44 PM

Sorry guys, Carmelo Anthony did not get $62 million in advance
August 16th, 2014

(originally posted elsewhere) For the most part, NBA players are paid on the first and fifteenth of every month, with a standard of 24 paydays per calendar year. Players earning more than the minimum can agree to 12 payments over six months or 36 payments over eighteen months, yet the norm is the norm. There is room for some further deviation from these standards. Players can receive both advances on their salary, and receive loans from their teams. There is not, however, room for the amount of deviation that is currently being reported in the case of Carmelo Anthony. It is being reported in several places around the web, most notably (and I believe initially) the Wall Street Journal, that Melo received 50% of his new $124,064,681 contract in one up front payment. Admittedly, it is not so much expressly stated as it is implied that this is the case, but whichever it is, the idea it spawned that he will or might have already gotten $62 million is wrong. The confusion comes from a misunderstanding about how, when and to what degree NBA contracts can be advanced, a confusion I hope to clarify here. The first and most important point to make is that salary for a future season can never ever be advanced. NBA seasons begin on July 1st and end on June 30th, so if it is October 6th 2014 and you want an advance on your 2015/16 salary, you are begrudgingly going to have to wait until July 1st 2015 to get so much as a piece of it. This rule alone is enough to show that the idea that Melo received a full 50% of the full life of the contract up front is false. There is, however, a reason the story exists, for the […]

Posted by at 1:22 AM